On January, 1, 2015, Perko Company acquires 70% of the common stock of Solan Company for $385,000 in a taxable combination. On this date, Solan has total owners' equity of $422,000, including retained earnings of $222,000. The excess of cost over book value is attributable to goodwill.

During 2015 and 2016, Solan Company reports the following information:

During 2015 and 2016, Perko appropriately accounts for its investment in Solan using the simple equity method, including income tax effects.
On January 1, 2016, Perko holds merchandise acquired from Solan for $10,000. During 2016, Solan sells merchandise to Perko for $60,000, of which $20,000 is held by Perko on December 31, 2016. Solan's usual gross profit on affiliated sales is 30%.
On December 31, 2015, Perko sells some equipment to Solan, with a cost of $40,000 and a book value of $18,000. The sales price is $39,000. Solan is depreciating the equipment over a 3-year life, assuming no salvage value and using the straight-line method.
Perko and Solan do not qualify as an affiliated group for tax purposes and, thus, will file separate tax returns. Assume a 30% corporate tax rate and 80% dividends received deduction.
The following trial balances are prepared by Perko and Solan on December 31, 2016:

Provision for income taxes (Perko):
Current ($100,000 _ 30%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $30,000
Solan dividends ($21,000 _ 20% _ 30%). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,260
$31,260
Current deferred taxes [($39,200 _ $21,000) _ 20% _ 30%]. . . . . . . . . . . . . . . . . . . 1,092
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $32,352
Deferred tax liability (Perko):
Current deferred taxes [($39,200 _ $21,000) _ 20% _ 30%]. . . . . . . . . . . . . . . . . $1,092
Change in Solan retained earnings [70% _ ($250,000 _ $222,000) _ 20% _ 30%] 1,176
Deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,268
Required
Prepare a consolidated worksheet for Perko Company and subsidiary Solan Company for the year ended December 31, 2016. Include the determination and distribution of excess schedule and the income determination schedules.

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2015 2016 Dividends 0 30,000 Solan 2 5 5 0 Current Tax Liability Deferred Tax liability Paid-In Capital in Excess of Par-Solan (190,000) (590,000) (370,000) 340,000 220,000 Depreciation Expense Buildings... 2 0 Perko Company 115,000 Solan Company 50,000 Provision for Tax.__ . . . . Subsidiary Income Dividends Declared Solan 32,352 39,200 60,000 24,000 30,000 枇. Totals.. 0 0