Refer to the preceding information for Fast Cool€™s acquisition of Fast Air€™s common stock. Assume Fast Cool issues 40,000 shares of its $20 fair value common stock for 100% of Fast Air€™s common stock. Fast Cool uses the simple equity method to account for its investment in Fast Air. Fast Cool and Fast Air have the following trial balances on December 31, 2011:

Required
1. Prepare a value analysis and a determination and distribution of excess schedule for the investment in Fast Air.
2. Complete a consolidated worksheet for Fast Cool Company and its subsidiary Fast Air Company as of December 31, 2011. Prepare supporting amortization and income distribution schedules.
Fast Cool Company and Fast Air Company are both manufacturers of air conditioning equipment. On January 1, 2011, Fast Cool acquires the common stock of Fast Air by exchanging its own $1 par, $20 fair value common stock. On the date of acquisition, Fast Air has the following balance sheet:

Fast Cool requests that an appraisal be done to determine whether the book value of Fast Air€™s net assets reflect their fair values. The appraiser determines that several intangible assets exist, although they are unrecorded. If the intangible assets do not have an observable market, the appraiser estimates their value. The appraiser determines the following fair values and estimates:
Accounts receivable . .. . . . . .. .. .. . .. . . . . .. . . . $ 40,000
Inventory (soldduring2011). . . .. .. ... .. . . .... ..65,000
Land.. . .. . . . . .. . . . . . .. .. .. .. .. . . . .. . . .. .. ... 100,000
Buildings (20-year life) . . . . . .. .... . .. . . . . .. . . .500,000
Equipment(5-year life).. . . . . .. .... . .. . . . . ......100,000
Patent (5-year life) .. . .. . . . . .. .. .. . .. . . . . .. . ...50,000
Current liabilities . .. . . . . . .. .. .. ... . . . . .. . . .. ..30,000
Mortgage payable (5-year life). .. ... .. .. . . . . .. ..205,000
Favorable purchase contract (2-year life) .. .. . . . . 10,000
Any remaining excess is attributed to goodwill.

1,200,000 400,000 Accumulated Depreciation. . . Goodwi Current Liabilities.... Morigage Payable. Paid-In Capital in Excess of Par . Retained Earnings, January 1, 2011 Depreciation Expense-Buildings Depreciation Expense-Equipment come 0 Dividends Declared Fast Air Company Balance Sheet January 1, 2011 Assets Liabilities and Equity Accoun ts receivable $ 40,000 Current liabilities 30,000 . .. . 200,000 60,000 Mortgage payable Land Buildings Accumulated depreciation. Equipment 400,000 Paid-in capital in excess of par. [50,000) Retained earmings 200,000 180,000 150,000 Accumulated depreciatio 30,000) 40,000 ...50,000 Patent (ne) Goodw Total assets.... $710,000 Toal labilities and equity $710,000