Panther Company acquires an 80% interest in Sargo Company for $272,000 on January 1, 2011, when Sargo Company has the following balance sheet:

The excess of the price paid over book value is attributable to the fixed assets, which have a fair value of $260,000, and to goodwill. The fixed assets have a 10-year remaining life. Panther uses the sophisticated equity method to record the investment in Sargo Company.
The following trial balances of the two companies are prepared on December 31, 2011:

1. If you did not solve Exercise 3, prepare a determination and distribution of excess schedule for the investment (a value analysis is not needed).
2. Prepare all the eliminations and adjustments that would be made on the 2011 consolidated worksheet.
3. If you did not solve Exercise 3, prepare the 2011 consolidated income statement and its related income distribution schedule.
4. If you did not solve Exercise 3, prepare the 2011 statement of retained earnings.
5. If you did not solve Exercise 3, prepare the 2011 consolidated balance sheet.

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Assets Liabilities and Equity $100,000 Current liabilities 50,000 100,000 150,000 $300,000 Current assets.... Depreciable fixed assets Common stock ($10 par) Retained earnings... 200,000 Total assets $300,000 Total liabilities and equity Panther Current Assets Depreciable Fixed Assets Accumulated Depreciation Sargo 130,000 200,000 38,000 400,000 (106,000 20,000 283,200 Current Liabilities. Common Stock ($10 par) Retained Earnings, January 1, 2011 Sales (60,000 40,000) (200,000 50,000) 110,000 (300,000 100,000) 150,000 100,000) 75,000 Subsidiary Income (from Sargo Companyl Dividends Declared 15,200) 5,000 Totals