Consolidation Worksheet as of the Acquisition Date Poz Inc., a calendar-year reporting company.

acquired 80% of Soz Inc.’s outstanding common stock at a cost of $168,000 on 12/31/05. Selected information on Soz as of the acquisition date follows:

Book Current Remaining Value Value Life Inventory . $150,000 $130,000 6 months Land . 100,000 130,000 Indefinite Building . 410,000 310,000 Long-term debt . 20 years 275,000 235,000 4 years Each company’s financial statements for the year ended 12/31/05, immediately after the acquisi- tion date, follow:

Poz Soz Income Statement (2005)

Sales . $ 950,000 Cost of sales . $ 800,000 (500,000) (600,000)

Expenses . (320,000) (250,000)

Net Income (Loss) . $ 130,000 $ (50,000)

1. Prepare an analysis of the Investment account by the components of the major conceptual ele¬
ments as of 12/31/05. (First separate the Investment account into the book value element and the excess cost elements.)
2. Prepare the consolidation entries at 12/31/05.
3. Prepare a consolidation worksheet at 12/31/05.
4. What amount of income does the parent company report to its stockholders for 2005?