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

Exercise 34

80%, cost, beginning and ending inventory. On April 1, 2011, Baxter Corporation purchased 80% of the outstanding stock of Crayon Company for $425,000. A condensed balance sheet of Crayon Company at the purchase date is shown on page 251.
b. On March 31, 2013, Baxter owed Crayon $10,000, and Crayon owed Baxter $5,000 as a result of the intercompany sales.
c. Baxter paid $25,000 in cash dividends on March 20, 2012 and 2013. Crayon paid its first cash dividend on March 10, 2013, giving each share of outstanding common stock a $0.15 cash dividend.
d. The trial balances of the two companies as of March 31, 2013, follow:
1. Prepare the worksheet necessary to produce the consolidated financial statements of Baxter Corporation and its subsidiary for the year ended March 31, 2013. Include the value analysis and a determination and distribution of excess schedule and the income distribution schedules.
2. Prepare the formal consolidated income statement for the fiscal year ending March 31, 2013.