On January 1, 2012, Parker Company purchased 90% of Sid Company's outstanding ordinary shares for $180,000. Sid's
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On January 1, 2012, Parker Company purchased 90% of Sid Company's outstanding ordinary shares for $180,000. Sid's equity at the time consisted of $120,000 of common stock; other contribution capital, $20,000; and retained earnings, $25,000. Suppose any difference between the book value of equity and the implied value of the purchase price can be attributed to the land. As of 31 December 2012, the balance sheet of the two companies is as follows:
| Parker | Sid | |||
| in advance | 65.000 $ | 35.000 $ | ||
| Accounts receivable | 40.000 | 30.000 | ||
| Inventory | 25.000 | 15.000 | ||
| Investment in Sid Company | 184.500 | —0— | ||
| Plant and equipment | 110.000 | 85.000 | ||
| Kara | 48.500 | 45.000 | ||
| Dividends Declared | 20.000 | 15.000 | ||
| cost of goods sold | 150.000 | 60.000 | ||
| operating expenses | 35.000 | 15.000 | ||
| Total Payables | 678.000 $ | 300.000 $ | ||
| Accounts payable | 20.000 $ | 15.000 $ | ||
| Other obligations | 15.000 | 25.000 | ||
| stock | 200.000 | 120.000 | ||
| Other Contribution Capital | 70.000 | 20.000 | ||
| Retained Profits, 1/1 | 55.000 | 25.000 | ||
| Sales | 300.000 | 95.000 | ||
| Equity in Affiliate Income | 18.000 | —0— | ||
| Total credit | 678.000 $ | 300.000 $ |
Prepare a consolidated statements worksheet dated December 31, 2012 . (Round answers to 0 decimal places, for example 5.125. List items that increase retained earnings first.)
Expert Answer:
To prepare a consolidated worksheet we first need to eliminate any intercompany transactions between ... View the full answer
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