Preparing a consolidation work sheet subsequent to year of acquisition. (Requires coverage of Appendices 11.1 and 11.2.) The condensed balance sheets of Companies S and J on December 31, Year 2, appear in Exhibit 11.19.

Company S owns 100 percent of the common stock of Company J. It acquired the stock of Company J on January 1, Year 1, when Company J's retained earnings amounted to \(\$ 40,000\). Company S holds a note issued by Company J in the amount of \(\$ 16,400\). Company \(\mathrm{S}\) attributes any excess of cost over book value acquired to a patent and amortizes it over 10 years.

Prepare a work sheet for a consolidation balance sheet.

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COMPANY S AND COMPANY J EXHIBIT 11.19 Balance Sheet Data December 31, Year 2 (Problem 51) Company S Company J ASSETS Cash Accounts and Notes Receivable $ 36,000 $ 26,000 180,000 Inventories Investment in Stock of Company J (using equity method) Plant Assets Total Assets LIABILITIES AND SHAREHOLDERS' EQUITY Accounts and Notes Payable Other Liabilities Common Stock $ 110,000 286,000 1,200,000 $ 59,000 22,000 500,000 100,000 386,000 69,000 Total Liabilities and Shareholders' Equity. $1,982,000 $750,000 Capital Contributed in Excess of Stated Value Retained Earnings 440,000 50,000 250,000 726,000 600,000 424,000 $1,982,000 $750,000