Paulcraft Corporation builds large powerboats. On January 1, 2011, Paulcraft acquires Switzer Corporation, a company that manufactures smaller power boats. Paulcraft pays cash in exchange for Switzer common stock. Switzer has the following balance sheet on January 1, 2011:

Appraisal values for identi?able assets and liabilities are as follows:
Accounts receivable...........................................................$ 82,000
Inventory (sold during 2011) ..................................................38,000
Land.............................................................................150,000
Buildings (20-year life) ......................................................280,000
Equipment(5-year life) .......................................................100,000
Current liabilities................................................................90,000
Bonds payable (5-year life) ...................................................96,000
Any remaining excess is attributed to goodwill.
Refer to the preceding information for Paulcrafts acquisition of Switzers common stock. Assume that Paulcraft pays $420,000 for 100% of Switzer common stock. Paulcraft uses the Partial Equity method to account for its investment in Switzer. Paulcraft and Switzer have the following trial balances on December 31, 2013:

1. Prepare a value analysis and a determination and distribution of excess schedule for the investment in Switzer.
2. Complete a consolidated worksheet for Paulcraft Corporation and its subsidiary Switzer Corporation as of December 31, 2013.

Transcribed Image Text:

Assets Liabilities and Equity S 82,000 . ...40,000 s 90,000 Bonds payable... Common stoc (S1 0000 Paid-in capital in excess of par ..90,000 Accumulated depreciation..(50,000) Equipment.. Total assets. 100,000 Accumulated depreciatio0,000) Totalliabilities and equity. S402,00 Paulcraft Switzer 120,000 100,000 515,000 .86,000 Land 60,000 (80,000) 100,000 Equipment 150,000 100,000) Common Stock ....(10,000) Paid-In Capital in Excessof Par 900,000) .(00,0005,000) 210,000 Cost of Goods Sold 450,000 Depreciation Expense Buildings .30,000 Depreciation Expense Equipment Other Expenses Interest Expense 15,000 140,000 8,000 68,000 10,000 Totals 000.00