Preparinji a consolidation work sheet subsequent to year of acquisition. (Requires coverage of Appendix 1 1.1.) The condensed balance sheets of Companies S and J on December 31. Year 2. appear in Exhibit I 1.22.

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 S attributes any excess of cost over book value acquired to goodwill and amortizes it over 10 years. Prepare a work sheet for a consolidation balance sheet.

Transcribed Image Text:

EXHIBIT 11.21 ELY COMPANY AND SIMS COMPANY Balance Sheet Data (Problem 50 ASSETS Cash Receivables Investment in Sims Company using equity method) Other Assets Ely Company Sims Company $ 12,000 25.000 $ 5,000 15,000 78,000 85,000 80,000 $200,000 $100,000 LIABILITIES AND SHAREHOLDERS EQUITY Current Liabilities Common Stock Retained Earings $ 45,000 50,000 105.000 $ 40,000 10,000 50,000 $200.000 $100,000