Problem $6-11($LO $4)$ Worksheet, separate tax, simple equity, inventory, fixed asset sale, analyze price. Refer to the preceding facts for Penske's acquisition of Stock common stock. Penske uses the simple equity method to account for its investment in Stock.During $2016,$ Stock sells $$30,000$ worth of merchandise to Penske. As a result of these inter$-$company sales, Penske holds beginning inventory of $$12,000$ and ending inventory of $$16,000$ of merchandise acquired from Stock. At December $31,2016,$ Penske owes Stock $$6,000$ from merchandise sales. Stock has a gross profit rate of $30\%.$On January $1,2015,$ Penske sells equipment having a net book value of $$50,000$ to Stock for $$90,000.$ The equipment has a $5-$year useful life and is depreciated using the straight$-$line method.Penske and Stock do not qualify as an affiliated group for tax purposes and, thus, will file separate tax returns. Assume a $40\%$ corporate tax rate and an $80\%$ dividends received exclusion.On December $31,2016,$ Penske and Stock have the following trial balances:PenskeCompanyStockCompanyCash$92,40053,200$Accounts Receivable$150,60090,000$Inventory$105,00090,000$Land...$\mathrm{.}100,000120,000$Investment in Stock$503,120$Buildings$800,000250,000$Accumulated Depreciation$(250,000)(70,000)$Equipment$210,000120,000$Accumulated Depreciation$(115,000)(90,000)$Goodwill $..\mathrm{.}30,000$Accounts Payable$(70,000)(40,000)$Current Tax Liability$(82,640)(16,800)$Bonds Payable$(100,000)$Deferred Tax Liability $($see note below$)(4,250)$Common Stock$(100,000)(10,000)$Paid$-$In Capital in Excess of Par$(600,000)(190,000)$Retained Earnings, January $1,2016.(617,683)(221,200)$Sales$(890,000)(350,000)$Cost of Goods Sold$480,000220,000$Depreciation Expense$-$Buildings$30,00010,000$Depreciation ExpenseEquipment$\mathrm{.}25,00010,000$Other Expenses$\mathrm{.}150,00060,000$Interest Expense$8,000$Provision for Income Tax $($see note below$)\mathrm{.}83,61316,800$Subsidiary Income.$(20,160)$Dividends Declared$20,00010,000$TotalsNote:Provision for income taxes $($Penske$)$:Current $($$$205,000\backslash$times $40\%)$Stock dividends $($$$8,000$ x $20\%\backslash$times $40\%)$Current deferred taxes $[($$$20,160-$ $$8,000)\backslash$times $20\%\backslash$times $40\%]$Provision for income taxes.$$82,000640$$$82,640973*$$$83,613$Deferred tax liability $($Penske$)$:Current deferred taxes $[($$$20,160-$ $$8,000)\backslash$times $20\%\backslash$times $40\%].$Change in Stock retained earnings $[80\%\backslash$times $($$$221,200-$ $$170,000)\backslash$times $20\%\backslash$times $40\%]$Deferred tax liability$*$Differences due to roundingRequired $>>1.$ Prepare a value analysis and a determination and distribution of excess schedule.