Panther Company acquires an 80% interest in Sargo Company for $272,000 in cash 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 Company uses the cost method to record its 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 or 5, 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 or 5, prepare the 2011 consolidated income statement and its related income distribution schedules.
4. If you did not solve Exercise 3 or 5, prepare the 2011 statement of retained earnings.
5. If you did not solve Exercise 3 or 5, prepare the 2011 consolidated balance sheet.

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Assets Liabilities and E 50,000 100,000 150,000 Currentliabilities.. Current assets.. Depreciable fixedassets $100,000 Common stock ($10 par).... Retained earnings.·… 200,000 Total assets. $300,000 Toal liabilities and equity $300,000 Panther Sargo 38,000 400,000 Current Assets Depreciable Fixed Assets Accumulated Depreciation Investment in Sargo Company... Current Liabilities.. Common Stock ($10 par) Retained Earnings, January 1, 2012.. . Sales Expenses Dividend Income (from Sargo Company) Dividends Declared 130,000 200,000 (106,000 20,000) 272,000 (60,000 40,000) (300,000 100,000) (200,000 50,000) 150,000 00,000) 75,000 ..( 110,000 4,000) 5,000