1.The Paris Company purchased an 80% interest in Seine, Inc. for $600,000 on July 1, 2015, when Seine had the following balance sheet:

Assets

Accounts receivable

$50,000

Inventory

120,000

Land

80,000

Building

270,000

Equipment

80,000

Total

$600,000

Liabilities and Equity

Current liabilities

$100,000

Common stock, $5 par

60,000

Paid-in capital in excess of par

140,000

Retained earnings (July 1)

300,000

Total

$600,000

The inventory is understated by $20,000 and is sold in the third quarter of 2015. The building has a fair value of $320,000 and a 10-year remaining life. The equipment has a fair value of $120,000 and a remaining life of 5 years. Any remaining excess is attributed to goodwill.

From July 1 through June 30, 2016, Seine had net income of $100,000 and paid $10,000 in dividends.

Assume that Paris uses the equity method to record its investment in Seine.

Required:

a.

do a determination and distribution of excess schedule as of July 1, 2015.

b.

Prepare the eliminations and adjustments that would be made on the June 30, 2016 consolidated worksheet to eliminate the investment in Seine. Distribute and amortize any excess.

Determination and distribution of excess schedule as of July 1, 2015:

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Elimination and Adjusting Entries as of June 30, 2016:

in Excel--------