1. Parrot Corporation acquired 90% of Swallow Co. on January 1, 2014 for $27,000 cash when Swallow's stockholders' equity consisted of $10,000 of Capital Stock and $5,000 of Retained Earnings. The difference between the fair value and boo k value of Swallow's net assets was allocated solely to a patent amortized over 5 years. The separate company statements for Parrot and Swallow appear in the first two columns of the par tially completed consolidation working papers. Required: Complete the consolidation working papers for Parrot and Swal low for the year 2014.

2.

Packo Company acquired all the voting stock of Sennett Corpo

ration on January 1, 2014 for

$90,000 when Sennett had Capital Stock of $50,000 and Retained Earnings

of $8,000. The

excess of fair value over book value was allocated as fol

lows: (1) $5,000 to inventories (sold

in 2014), (2) $16,000 to equipment with a 4-year remaining useful life

(straight-line method

of depreciation) and (3) the remainder to goodwill.

Financial statements for Packo and Sennett at the end of

the fiscal year ended December 31,

2015 (two years after acquisition), appear in the first two

columns of the partially completed

consolidation working papers. Packo has accounted for its i

nvestment in Sennett using the

equity method of accounting.

Required:

Complete the consolidation working papers for Packo Com

pany and Subsidiary for the year

ending December 31, 2015

1. Parrot Corporation acquired 90% of Swallow Co. on January 1, 2014 for $27,000 cash when Swallow's stockholders' equity consisted of $10,000 of Capital Stock and $5,000 of Retained Earnings. The difference between the fair value and book value of Swallow's net assets was allocated solely to a patent amortized over 5 years. The separate company statements for Parrot and Swallow appear in the first two columns of the partially completed consolidation working papers. Required: Complete the consolidation working papers for Parrot and Swallow for the year 2014. 2. Packo Company acquired all the voting stock of Sennett Corporation on January 1, 2014 for $90,000 when Sennett had Capital Stock of $50,000 and Retained Earnings of $8,000. The excess of fair value over book value was allocated as follows: (1) $5,000 to inventories (sold in 2014), (2) $16,000 to equipment with a 4-year remaining useful life (straight-line method of depreciation) and (3) the remainder to goodwill. Financial statements for Packo and Sennett at the end of the fiscal year ended December 31, 2015 (two years after acquisition), appear in the first two columns of the partially completed consolidation working papers. Packo has accounted for its investment in Sennett using the equity method of accounting. Required: Complete the consolidation working papers for Packo Company and Subsidiary for the year ending December 31, 2015