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

Exercise 30

Simple equity method adjustments, vertical consolidated worksheet. (Same as Problem 3-2 except vertical format worksheet is used.) On January 1, 2011, Peres Company purchases 80% of the common stock of Soap Company for $308,000. On this date, Soap has common stock, other paid-in capital in excess of par, and retained earnings of $50,000, $100,000, and $150,000, respectively. Net income and dividends for two years for Soap Company are as follows:
On January 1, 2011, the only undervalued tangible assets of Soap are inventory and the building. Inventory, for which FIFO is used, is worth $10,000 more than cost. The inventory is sold in 2011. The building, which is worth $25,000 more than book value, has a remaining life of 10 years, and straight-line depreciation is used. The remaining excess of cost over book value is attributable to goodwill.
1. Using this information or the information in the following statements for the year ended December 31, 2012, prepare a determination and distribution of excess schedule.
2. Complete the vertical worksheet for consolidated financial statements for 2012.