P6-1 Downstream sale of land Rashed QSC is a 90 percent-owned subsidiary of Nase QSC. The separate trial balance for the year ended in 2014 for both companies is as follows:

Debits Nase QSC Rashed QSC Cash $ 200 $ 100 Accounts receivable 300 200 Inventory 700 800 Land 1,200 700 Equipment 400 400 Investment in Rashed QSC 2,880 0 Cost of sales 2,400 1,700 Other expenses 200 200 Dividends 300 100 Total $ 8,580 $ 4,200 Credits Accounts payable $ 100 $ 100 Common stock 2,200 1,000 Retained Earnings 2,980 800 Sales 3,100 2,300 Gain on sale of land 200 0 Total $ 8,580 $ 4,200 ADDITIONAL INFORMATION 1. During 2014, Rashed QSC sells inventories for $700,000 to Nase QSC. Nase QSC’s inventories at December 31, 2014, include an unrealized profit of $100,000.

2. On March 1, 2014, Rashed QSC purchases land for $500,000 from Nase QSC. The value of the land in Nase QSC’s book at this date is $300,000.

3. Nase QSC’s accounts receivable at the end of 2014 includes $100,000 due from Rashed QSC.

4. Any fair value/book value differential is due to goodwill.

R E Q u I R E D : Prepare consolidation workpapers for Nase QSC and Subsidiary for the year ended December 31, 2014.