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

Exercise 13

Simple equity method adjustments, consolidated worksheet. On January 1, 2011, Peres Company purchases 80% of the common stock of Soap Company for $308,000. 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 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 attributed to goodwill.
1. Using this information and the information in the following trial balances on December 31, 2012, prepare a value analysis and a determination and distribution of excess schedule:
2. Complete a worksheet for consolidated financial statements for 2012. Include columns for eliminations and adjustments, consolidated income, NCI, controlling retained earnings, and consolidated balance sheet.