Question: Please complete the Consolidated Worksheet in the ... Please complete the Consolidated Worksheet in the format that I should be submitting it in so that I understand it. Alternative Investment Methods, Goodwill Impairment, and Consolidated Financial Statements In this project, you are to provide an analysis of alternative accounting methods for controlling interest investments and subsequent effects on consolidated reporting.

The first objective is to demonstrate the effect of different methods of accounting for the investments (equity, initial value, and partial equity) on the parent company's trial balance and on the consolidated worksheet subsequent to acquisition. The second objective is to show the effect on consolidated balances and key financial ratios of recognizing a goodwill impairment loss. The project requires preparation of the following four separate worksheets:

a. Consolidated information worksheet (follows).

b. Equity method consolidation worksheet.

c. Initial value method consolidation worksheet.

d. Partial equity method consolidation worksheet. Project Scenario Pecos Company acquired 100 percent of Suaro's outstanding stock for $1,450,000 cash on January 1, 2014, when Suaro had the following balance sheet:

Assets Liabilities and Equity

cash 37000 Liabilities (442000)

Receivables 82000

Inventory 149000 Common Stock (350000)

Land 90000 Retained Earnings (126000)

Equipment (net) 225000 Software 315000

Total Assets 898000 Total Liab. & Equity (898000)

At the acquisition date, the fair values of each identifiable asset and liability that differed from book value were as follows:

Land 80000

Brand Name 60000 Indefinite life- unrecognized on Suaro's books)

Software 415000 2 yr. est. remaining useful life In-process r&d 300000

Additional Information

Although at acquisition date Pecos expected future benefits from Suaro's in-process research and development (R&D), by the end of 2014, it became clear that the research project was a failure with no future economic benefits. During 2014, Suaro earns $75,000 and pays no dividends. Selected amounts from Pecos and Suaro's separate financial statements at December 31, 2015, are presented in the consolidated information worksheet. All consolidated worksheets are to be prepared as of December 31, 2015, two years subsequent to acquisition. Pecos's January 1, 2015, Retained Earnings balancebefore any effect from Suaro's 2014 incomeis $(930,000) (credit balance). Pecos has 500,000 common shares outstanding for EPS calculations and reported $2,943,100 for consolidated assets at the beginning of the period. Following is the consolidated information worksheet.

Project Requirements

Complete the four worksheets as follows:

1.

Input the consolidated information worksheet provided and complete the fair-value allocation schedule by computing the excess amortizations for 2014 and 2015.

2.

Using separate worksheets, prepare Pecos's trial balances for each of the indicated accounting methods (equity, initial value, and partial equity). Use only formulas for the Investment in Suaro, the Income of Suaro, and Retained Earnings accounts.

3.

Page 147

Using references to other cells only (either from the consolidated information worksheet or from the separate method sheets), prepare for each of the three consolidation worksheets:

Adjustments and eliminations.

Consolidated balances.

I already have the fair value allocation schedule so it is not listed but PLEASE help with the following consolidation worksheet, is mainly what I need!!!!

December 31, 2015, trial balances
	Pecos	Suaro
Revenues	(1052000)	(427000)
Operating Expenses	821000	262000
Goodwill Impairment Loss	?
Income of Suaro	?
Net Income	?	(165000)
Retained Earnings-Pecos 1/1/15	?
Retained Earnings-Suaro 1/1/15		(201000)
Net Income (above)	?	(165000)
Dividends Declared	200000	35000
Retained Earnings for 12/31/15	?	(331000)
Cash	195,000	95,000
Receivables	247,000	143,000
Inventory	415,000	197,000
Investment in Suaro
Land	341,000	85,000
Equipment (net)	240,100	100,000
Software		312,000
Other Intangibles	145,000	0
Brand Name		0
Goodwill		0
Total Assets	?	932,000
Liabilities	(1,537,100)	(251,000)
Common Stock	(500,000)	(350,000)
Retained Earnings (above)	?	(331,000)
Total Liabilites & Equity	?	(932,000)