5. Create a simply equity worksheet.

Equity method, first year, eliminations, statements. Pepper Company purchascd an 80% interest in Salt Company for $250,000 in cash on January 1, 20X1, when Salt Company had the following balance sheet: Assets Liabilities and Equi 50,000 100,000 150,000 $300,000 Depreciable fixed assets . $300,000 Total liabilities and equity Any excess of the price paid over book value is attributable only to the fixed assets, which ve a 10-year remaining life. Pepper Company uses the simple equity method to record its investment in Salt Company he following trial balances of the two companies were prepared on December 31, 20X1: Pe Salt Current Assets . 60,000 400,000 (106,000) 266,000 130,000 200,000 (20,000) .. (60,000 40,000) 300,000 100,000) (200,000) 150,000) 50,000 (100,000) 75,000 Sales . .. 110,000 (20,000) penses. 5,000 Total 1. Prepare a determination and distribution of excess schedule for the investment. 2. Prepare all the eliminations and adjustments that would be made on the 20X1 consolidated worksheet. 3. Prepare the 20X1 consolidated income statement and its related income distribution schedules 4. Prepare the 20XI consolidated balance sheet