Parker Company acquires an 80 interest in Sargent Company for $300,000 on January 1, 2015, when Sargent Company has the following balance sheet The excess of the price paid over book value is attributable to the fixed assets, which have a fair value of $250,000, and to goodwill The fixed assets hav...

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Parker Company acquires an 80% interest in Sargent Company for $300,000 on January 1, 2015, when Sargent

Question:

Parker Company acquires an 80% interest in Sargent Company for $300,000 on January 1, 2015, when Sargent Company has the following balance sheet:

Assets Current assets Depreciable fixed assets Total assets. $100,000 200,000 $300,000 Liabilities and Equity

The excess of the price paid over book value is attributable to the fixed assets, which have a fair value of $250,000, and to goodwill. The fixed assets have a 10-year remaining life. Parker uses the sophisticated equity method to record the investment in Sargent Company.

The following trial balances of the two companies are prepared on December 31, 2015:

Current Assets Depreciable Fixed Assets Accumulated Depreciation Investment in Sargent Company Current

1. If you did not solve Exercise 3, prepare a determination and distribution of excess schedule for the investment (a value analysis is not needed).
2. Prepare all the eliminations and adjustments that would be made on the 2015 consolidated worksheet.
3. If you did not solve Exercise 3, prepare the 2015 consolidated income statement and its related income distribution schedule.
4. If you did not solve Exercise 3, prepare the 2015 statement of retained earnings.
5. If you did not solve Exercise 3, prepare the 2015 consolidated balance sheet.

Data From Exercise 3:

Parker Company acquires an 80% interest in Sargent Company for $300,000 in cash on January 1, 2015, when Sargent Company has the following balance sheet:

Assets Current assets Depreciable fixed assets (net). Total assets... $100,000 200,000 $300,000 Liabilities

The excess of the price paid over book value is attributable to the fixed assets, which have a fair value of $250,000, and to goodwill. The fixed assets have a 10-year remaining life. Parker Company uses the simple equity method to record its investment in Sargent Company.

The following trial balances of the two companies are prepared on December 31, 2015:

Current Assets.. Depreciable Fixed Assets Accumulated Depreciation Investment in Sargent Company Current