Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng

تمرين 17

Worksheet, preferred stock, fixed asset sale. Marsha Corporation purchases an 80% interest in the common stock of Transam Corporation on December 31, 2013, for $720,000, when Transam has the following condensed balance sheet:
On the December 31, 2013, purchase date, the dividends on the preferred stock are two years in arrears. Also on this date, the book values of Transam's assets approximate fair values, except for the building which is undervalued by $28,000 and has a 20-year remaining life. Any remaining excess is considered to be goodwill.
For 2014-2016, earnings and dividends for Transam Corporation are as follows:
On January 1, 2015, Marsha sells production equipment to Transam for $55,000 with a 5-year remaining life. Marsha's original cost is $80,000, and accumulated depreciation on the date sold is $50,000.
Prepare the worksheet necessary to produce the consolidated financial statements ofMarsha Corporation and its subsidiary as of December 31, 2016. Include the determination and distribution of excess and income distribution schedules.