Interim Purchase, Full-Year Reporting Alternative, Cost Method Punca Company purchased 85% of the common stock of Surrano Company on July 1, 2003, for a cash payment of $590,000. December 31, 2003, trial balances for Punca and Surrano were: LO6 Punca Surrano Current Assets $ 150,000 $ 180,000 Treasury Stock at Cost, 500 shares —0— 48,000 Investment in Surrano Company 590,000 —0—
Property and Equipment 1,250,000 750,000 Cost of Goods Sold 1,540,000 759,000 Other Expenses 415,000 250,000 Dividends Declared —0— 50,000 Total $3,945,000 $2,037,000 Accounts and Notes Payable $ 277,500 $ 150,000 Dividends Payable —0— 50,000 Capital Stock, $5 par value 270,000 40,000 Other Contributed Capital 900,000 250,000 Retained Earnings, 1/1 355,000 241,000 Sales 2,100,000 1,300,000 Dividend Income 42.500 6,000 Total $3,945,000 $2,037,000 Surrano Company declared a $50,000 cash dividend on December 20, 2003, payable on January 10, 2004, to stockholders of record on December 31, 2003. Punca Company recognized the dividend on its declaration date. Any difference between cost and book value relates to subsidiary land, included in property and equipment.
Required:
Prepare a consolidated statements workpaper at December 31, 2003, assuming that revenue and expense accounts of Surrano Company for the entire year are included with those of Punca Company (full-year reporting alternative).