1) Preparing a Determination and Distribution of Excess Schedule for the Investment:
Determination and Distribution of Excess Schedule
Price paid for investment		$250,000
Less book value of interest acquired:
Common stock ($10 par)	$100,000
Paid-in capital in excess of par	-
Retained earnings	$150,000
Total equity	$250,000
Interest acquired	80%	$200,000
Excess of cost over book value (debit)		$50,000
Existing goodwill		-
Excess available		$50,000
Adjustments:			Amortization
Depreciable fixed assets		$50,000	10 Debit	$5,000
Goodwill		-
Extraordinary gain		-
Total adjustments		$50,000
2) Preparing all the Elimination and Adjustments that would be Made on the 20X1 Consolidated Worksheet:
Event	General Journal	Debit	Credit
CY1	Subsidiary Income	$15,000
	Investment in Salt Company		$15,000
CY2	Investment in Salt Company	$4,000
	Dividends Declared		$4,000
EL	Common Stock - Salt	$80,000
	Retained Earnings - Salt	$120,000
	Investment in Salt Company		$200,000
D	Depreciable Fixed Assets*	$50,000
	Investment in Salt Company		$50,000
	*No accumulated depreciation existed on the date of acquisition
A	Depreciation Expense	$5,000
	Accumulated Depreciation		$5,000
3) Preparing the 20X1 Consolidated Income Statement and its Related Distribution Schedules:
Pepper Company and Salt Company
Consolidated Income Statement
For Year Ended December 31, 20X1
Revenue	$250,000
Less: Expenses (add $5,000 adjustment)	$190,000
Consolidated net income	$60,000
Distributed to noncontrolling interest	$5,000
Distributed to controlling interest	$55,000
Subsidiary Salt Company Income Distribution
		Internally generated net income	$25,000
		Adjusted income	$25,000
		NCI share	20%
		NCI	$5,000
Parent Pepper Company Income Distribution
Depreciable fixed assets	$5,000	Internally generated net income	$40,000
		80% * Salt adjusted income of $25,000	$20,000
		Controlling interest	$55,000
4) Preparing the 20X1 Consolidated Balance Sheet:
Pepper Company and Salt Company
Consolidated Balance Sheet
December 31, 20X1
Assets:
Current assets		$190,000
Depreciable fixed assets	$650,000
Less accumulated depreciation	$131,000	$519,000
Total assets.		$709,000
Liabilities and Stockholders Equity
Current liabilities		$100,000
Stockholders equity:
Noncontolling interest		$54,000
Controlling interest:
Common Stock	$300,000
Retained earnings	$255,000	$555,000
Total liabilities and stockholders equity		$709,000

1. Do A worksheet for Consolidated Financial Statement

for Pepper and Salt Company