Rapid Delivery Corporation was created on January 1, 20X2, and quickly became successful. On January 1, 20X6, the owner sold 80 percent of the stock to Samuelson Company at underlying book value. Samuelson has continued to operate the subsidiary as a separate legal entity and uses the cost method in recording investment income.

Trial balance data for the two companies on December 31, 20X6, consist of the following:

Retained earnings of Rapid Delivery Corporation on the date of acquisition was \(\$ 100,000\).
\section*{Required}
You have been asked by the controller of Samuelson Company to prepare a three-part consolidation workpaper in good form and to prepare a consolidated income statement, balance sheet, and statement of changes in retained earnings for the year 20X6.

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Samuelson Company Rapid Delivery Corporation Credit Item Debit Credit Debit Cash and Receivables $ 141,000 $ 80,000 Inventory 240,000 100,000 Land 80.000 20,000 Buildings and Equipment 500,000 150,000 Investment in Rapid Delivery Stock 120,000 Cost of Goods Sold 500,000 250.000 Depreciation Expense 25.000 15.000 Wage Expense 45.000 35,000 Other Expenses 30.000 40,000 Dividends Declared 50,000 20,000 Accumulated Depreciation $ 155,000 $ 75,000 Accounts Payable 70.000 35,000 Sales Notes Payable Common Stock Retained Earnings Dividend Income 200,000 50,000 300,000 50,000 290.000 100.000 700,000 400,000 16.000 $1.731.000 $1.731.000 $710,000 $710,000