Problem 7-2 (LO 2) Worksheet, blocks, control with first block, merchandise sales. On January 1, 2015, James Company purchases 70% of the common stock of Craft Company for $245,000. On this date, Craft has common stock, other paid-in capital in excess of par, and retained earnings of $50,000, $100,000, and $150,000, respectively.

The question requires please provide as much as possible:

1. Determination and distribution schedule

2. analysis of 20% interest

3. entries and computations

4. Income distribution schedules

5. consolidated worksheet

Problem 7-2 (LO 2) Worksheet, blocks, control with first block, merchandise sales. On January 1, 2015, James Company purchases 70% of the common stock of Craft Company for $245,000. On this date, Craft has common stock, other paid-in capital in excess of par, and retained earnings of $50,000, $100,000, and $150,000, respectively. On May 1, 2016, James Company purchases an additional 20% of the common stock of Craft Company for $92,000. Net income and dividends for two years for Craft Company are as follows: 2015 2016 .$60,000 $90,000 20,000 30,000 In 2016, the net income of Craft from January 1 April 30 is $30,000. On January 1, 2015, the only tangible asset of Craft that is undervalued is equipment, In the last quarter of 2016, Craft sells $50,000 in goods to James, at a gross profit rate of The trial balances for the companies on December 31, 2016, are as follows: which is worth $20,000 more than book value. The equipment has a remaining life of four years, and straight-line depreciation is used. Any remaining excess is goodwill. 30%. On December 31, 2016, $ 10,000 of these goods are in James's ending inventory. James Compony Craf Inventory, December 31 Other Current Assets Investment in Crafit Company Land 50,000 26,000 180,000 20,000 (120,000 (40,000) (100,000] Current Liabilities Bonds Payable Other long-Term Liabilities Common Stock James . , (200,000 200,000) Retained Earning-James (214,000) 50,000) (100,000] (190,000 520,000 450,000) 300,000 260,000 121,000 00,000 Net Sales . Operating Expenses... Subsidiary Income... 50,000 30,000 * To be colculeted and inserted 1 . Using this information, prepare a determination and distribution ofexcess schedule. Prepare 2. James Company carries the investment in Craft Company under the simple equity method. ed an analysis ofthe later purchase ofa 20% interest. In general journal form, record the entries that would be made to apply the equity method in 2015 and 2016