Translate a trial balance and prepare a consolidation worksheet with excess of cost over book value traceable to equipment. Due to increasing pressures to expand globally, Pueblo Corporation acquired a 100% interest in Sorenson Company, a foreign company, on January 1, 2016. Pueblo paid 12,000,000 FC, and Sorenson's equity consisted of the following:
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 FC
Paid-in capital in excess of par . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,200,000
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,200,000 FC
On the date of acquisition, equipment with a 10-year life was undervalued by 500,000 FC. Any remaining excess of cost over book value is attributable to additional equipment with a 20-year life. The trial balances for Pueblo and Sorenson as of December 31, 2018, are as follows:

The investment in Sorenson consists of the following:
Initial investment (12,000,000 FC _ $1.20) . . . . . . . . . . . . . . . . $14,400,000
2016 Income (1,750,000 FC _ $1.28) . . . . . . . . . . . . . . . . . . . . 2,240,000
2017 Income (2,000,000 FC _ $1.30) . . . . . . . . . . . . . . . . . . . . 2,600,000
2018 Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,729,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,969,000
Relevant exchange rates are as follows:
1FC ¼
January 1, 2016 . . . . . . . . . . . . . . . . . . . $1.20
2016 Average. . . . . . . . . . . . . . . . . . . . . 1.28
January 1, 2017 . . . . . . . . . . . . . . . . . . . 1.25
2017 Average. . . . . . . . . . . . . . . . . . . . . 1.30
December 31, 2018 . . . . . . . . . . . . . . . . 1.31
2018 Average. . . . . . . . . . . . . . . . . . . . . 1.33
Required
Assuming the FC is Sorenson's functional currency, prepare a consolidated worksheet.

Transcribed Image Text:

Pueblo Corporat ion Sorenson Company 0 Accumulated Depreciation Long-Term Debt PaidIn Capital in Excess of Par (10,000,000) 26,000,00010 16,380,000 3,210,000 (1.729,000 (10,000,000] 7,500,000 1,200,000 Sales . Cost of Goods Sold..__ _ . . . _ _ _ _ . 0 0 FC