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

Exercise 33

80%, equity, several excess distributions, fixed asset sale. Refer to the preceding facts for Panther's acquisition of Sandin common stock. On January 1, 2012, Panther held merchandise sold to it from Sandin for $12,000. This beginning inventory had an applicable gross profit of 25%. During 2012, Sandin sold merchandise to Panther for $75,000. On December 31, 2012, Panther held $18,000 of this merchandise in its inventory. This ending inventory had an applicable gross profit of 30%. Panther owed Sandin $20,000 on December 31 as a result of this intercompany sale. On January 1, 2012, Panther sold equipment with a book value of $35,000 to Sandin for $50,000. Panther also sold some fixed assets to nonaffiliates. During 2012, the equipment was used by Sandin. Depreciation is computed over a 5-year life, using the straight-line method.
1. Prepare a value analysis and a determination and distribution of excess schedule for the investment in Sandin.
2. Complete a consolidated worksheet for Panther Company and its subsidiary Sandin Company as of December 31, 2012. Prepare supporting amortization and income distribution schedules.
Problem 4-8 (LO 3)