(Problem 4-14) 80%, equity, several excess distribution, inventory, fixed assets, parent and subsidiary sales. Refer to the preceding facts for the Purples acquisition of Salmon common stock. On January 1, 2012, Salmon held merchandise sold to it by Purple for $14,000. This beginning inventory had an applicable gross profit of 40%. During 2012, Purple sold merchandise to Salmon for $60,000. On December 31, 2012, Salmon held $12,000 of this merchandise in its inventory. This ending inventory had an applicable gross profit of 35%. Salmon owed Purple $8,000 on December 31 as a result of the intercompany sale. Purple held $12,000 worth of merchandise in its beginning inventory from sales from Salmon. This beginning inventory had an applicable gross profit of 25%. During 2012, Salmon sold merchandise to Purple for $30,000. Purple held $16,000 of this inventory at the end of the year. This ending inventory had an applicable gross profit of 30%. Purple owed Salmon $6,000 on December 31 as a result of this intercompany sale. On January 1, 2011, Purple sold equipment to Salmon at a profit of $40,000. Depreciation on this equipment is computed over an 8-year life using the straight-line method. On January 1, 2012, Salmon sold equipment with a book value of $30,000 to Purple for $54,000. This equipment has a 6-year life and is depreciated using the straight-line method. Purple and Salmon had the following trial balances on December 31, 2012: Purple Salmon Company Company Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,400 57,500 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130,000 36,000 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105,000 76,000 Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 100,000 Investment in Salmon Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381,200 Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800,000 150,000 Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (250,000) (60,000) Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210,000 220,000 Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (115,000) (80,000) Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000 Accounts Payable (70,000) (78,000) Bonds Payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (200,000) Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (100,000) (10,000) Paid-In Capital in Excess of Par . . . . . . . . . . . . . . . . . . . . . . . . . . (800,000) (90,000) Retained Earnings, January 1, 2012. . . . . . . . . . . . . . . . . . . . . . . (325,000) (142,000) Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (800,000) (350,000) Cost of Goods Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450,000 208,500 Depreciation ExpenseBuildings . . . . . . . . . . . . . . . . . . . . . . . . 30,000 5,000 Depreciation ExpenseEquipment. . . . . . . . . . . . . . . . . . . . . 25,000 23,000 Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,000 92,000 Interest Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,000 Gain on Sale of Fixed Assets . . . . . . . . . . . . . . . . . . . . . . . (24,000) Subsidiary Income (23,600) Dividends Declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 10,000 Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 1. Prepare a value analysis and a determination and distribution of excess schedule for the investment in Salmon. 2. Complete a consolidated worksheet for Purple Company and its subsidiary Salmon Company as of December 31, 2012. Prepare supporting amortization and income distribution schedules.