Harvard Company purchases a 90% interest in Bart Company for $720,000 on January 1, 2015. The investment is accounted for under the cost method. At the time of the purchase, a building owned by Bart is understated by $180,000; it has a 20-year remaining life on the purchase date. The remaining excess is attributed to goodwill. The stockholders’ equity of Bart Company on the purchase date is as follows:

The following summarized statements are for the year ended December 31, 2016. (Credit balance amounts are in parentheses.)

Required

Using the vertical format, prepare a consolidated worksheet for December 31, 2016. Precede the worksheet with a value analysis and a determination and distribution of excess schedule. Include income distribution schedules to allocate the consolidated net income to the noncontrolling and controlling interests.

Suggestion: Remember that all adjustments to retained earnings are to beginning retained earnings, and it is the beginning balance of the subsidiary retained earnings account that is subject to elimination. One of the adjustments to the parent retained earnings account is the cost-to-equity conversion entry. Be sure to follow the carrydown procedure to calculate the ending retained earnings balances.