The December 31, 2012, trial balances of Pettie Corporation and its 90%-owned subsidiary Sunco Corporation are as follows:
Pettieâ€™s investment in Sunco was purchased for $1,260,000 in cash on January 1, 2011, and was accounted for by the cost method. On January 1, 2011, Sunco had the following equity balances:
Common stock. . . . . . . . . . . . . $200,000
Retained earnings . . . . . . . . . . 600,000
Total equity . . . . . . . . . . . . . $800,000
Pettieâ€™s excess of cost over book value on Suncoâ€™s investment has been identified as goodwill. Sunco borrowed $100,000 from Pettie on June 30, 2012, with the note maturing on June 30, 2013, at 10% interest. Correct accruals have been recorded by both companies. During 2012, Pettie sold merchandise to Sunco at an aggregate invoice price of $300,000, which included a profit of $75,000. As of December 31, 2012, Sunco had not paid Pettie for $90,000 of these purchases, and 10% of the total merchandise purchased from Pettie still remained in Suncoâ€™s inventory.
Sunco declared a $1,000 cash dividend in December 2012 payable in January 2013.
Prepare the worksheet required to produce the consolidated statements of Pettie Corporation and its subsidiary, Sunco Corporation, for the year ended December 31, 2012. Include the valuation analysis, the determination and distribution of excess schedule, and the income distribution schedules.