Lofton Company owns 60 percent of the voting shares of Temple Corporation, purchased on May 17. 20X1, at underlying book value. The permanent accounts of the companies on December 31, 20X6, contained the following balances:

On January 1, 20X2, Lofton Company paid \(\$ 100,000\) for equipment with an expected total economic life of 10 years. The equipment was depreciated on a straight-line basis with no residual value. Temple Corporation purchased the equipment from Lofton Company on December 31. 20X4, for \(\$ 91,000\).

Temple Corporation sold land it had purchased for \(\$ 30,000\) on February 23, 20X4, to Lofton Company for \(\$ 20,000\) on October 14, 20X5.
\section*{Required}

a. Prepare a consolidated balance sheet workpaper in good form as of December 31, 20X6.

b. Prepare a consolidated balance sheet as of December 31, 20X6.

Transcribed Image Text:

Cash and Receivables. $101.000 Inventory 80.000 Lofton Company Temple Corporation $ 20,000 40.000 Land 150,000 90.000 Buildings and Equipment 400.000 300.000 Investment in Temple Corporation Stock 150.000 $881.000 $450,000 Accumulated Depreciation Accounts Payable Notes Payable Common Stock $135.000 $ 85,000 90.000 25,000 200,000 90,000 100,000 200.000 Retained Earnings 356.000 50,000 $881.000 $450,000