Problem 3-3 (LO 4) Sophisticated equity method adjustments, consolidated worksheet. (This is the same as Problem 3-2, except the sophisticated equity method is used.) On January 1, 20X1, Peres Company purchased 80% of the common stock of Soll Com pany for $308,000. On this date, Soll had common stock, other paid-in capital, and retained earnings of $50,000, $100,000, and $150,000, respectively. Net income and dividends for two years for Soll Company were as follows: 20X1 $60,000 20.000 20x2 $90,000 30.000 Net income Dividende and the building Inventory for which FIFO is used was worth $10,000 more than on On January 1, 20XT, the only tangible assets of Soll that were undervalued were www remaining life of 10 years, and straight-line depreciation is used. The remaining excess to inventory was sold in 20X1. The building, which is worth $25.000 more than book value over book value is attributable to will 1. Using this information or the information in the following trial balances, prepare a det 2. Penes Company carries the investment in Soll Company under the sophisticated 3. Compute the balance that should appear in Investment in Soll Company and in Soll income on December 31, 20X2 (the second year. Fill in these amounts on Peres Company thi 4. Complete a worksheer for consolidated financial statements for 20X2. Include columns climinations and adjustments, consolidared income, NCI. controlling retained can method in 20X1 and 20X2 balance for 20X2 Required apply the and distribution of excess . method. In general journal form, record the entries that would be made to and balance sheet. Sol Company Peres Company 100,000 148,000 Note 1 50,000 180.000 50.000 350,000 (100,000) 50.000 320.000 160,000 20,000 (120,000) 140,000 1100,000 Inventory, December 31 Other Current Assets Investment in Soll Company Land. Buildings and Equipment Accumulated Depreciation Goodwill Other Intangibles. Current Liabilities Bonds Payable Other Long Term Liabilities Common Stock, P Company Other Paid in Capitol, P Compony Retoined Earnings, P Compony Common Stock, Company Other Paid in Capital, Company Retained Earnings, Company Net Sales Cost of Goods Sold Operating Expenses Sol Income (200,000) (200,000) (100,000) (204,000) (50,000 1100,000 (190,000 (450,000 260,000 100.000 (520,000) 300,000 120,000 Note 50,000 Dividends Declared, P Company Dividends Declared, S Company Note 1: To be calculated 30.000