Consolidation Worksheet Subsequent to the Acquisition Date (Continuation of Problem 6-8) As described in Problem 6-8, Poz acquired 80% of Soz for $168,000 on 12/31/05. The financial state¬

ments as of 12/31/06, one year after the acquisition date, follow:

Poz Soz Income Statement (2006)

Sales Cost of

.

sales .

Expenses Equity in

.

net income (of Soz). .

Net Income (Loss) .

Balance Sheet (as of 12/31/06)

Accounts Cash .

receivable, net .

Inventory Investment

.

in Soz .

Land Buildings

.

and equipment .

Accumulated depreciation . . . .

Total Assets .

Payables and accruals .

Common Long-term stock debt . .

Additional paid-in capital . . . .

Retained earnings .

Total Liabilities and Equity .

Dividends declared during 2006

$ 910,000 $ 820,000 (510,000) (505,000)

(310,000) (245,000) 68,000

$ 158,000 $ 70,000

$ 73,000 $ 20,000 115,000 80,000 90,000 120,000 200,000 190,000 100,000 500,000 305,000

(460,000) (85,000)

$ 708,000 $ 540,000

$ 75,000 $ 25,000 10,000 230,000 20,000 5,000 380,000 223,000 95,000 185,000

$ 708,000 $ 540,000

$ 135,000

$ -0-

1. Update the analysis of the Investment account through 12/31/06.

2. Prepare the consolidation entries at 12/31/06.

3. Prepare a consolidation worksheet at 12/31/06. (Poz’s retained earnings at 12/31/05 were $200,000.)