Problem 3-15 (LO 2, 5) 100%, complicated excess, equity, second year. Refer to the preceding information for Fast Cool’s acquisition of HD Air’s common stock. Assume Fast Cool issued 40,000 shares of its $20 fair value common stock for 100% of HD Air’s common stock.

Fast Cool uses the simple equity method to account for its investment in HD Air. Fast Cool and HD Air had the following trial balances on December 31, 20X2:

Fast Cool HD Air Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396,000 99,000 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000 120,000 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000 95,000 Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000 50,000 Investment in HD Air . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 895,000 Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200,000 400,00 1. Prepare a zone analysis and a determination and distribution of excess schedule for the investment in HD Air.
2. Complete a consolidated worksheet for Fast Cool Company and its subsidiary HD Air Company as of December 31, 20X2. Prepare supporting amortization and income distribution schedules.