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4) Place Company purchased 92% of the common stock of Shaw, Inc. on January 1, 2012, for $400,000. Trial bal- ances at the end of
4) Place Company purchased 92% of the common stock of Shaw, Inc. on January 1, 2012, for $400,000. Trial bal- ances at the end of 2012 for the companies were: Place Shaw Cash $ 80,350 $ 87,000 Accounts and Notes Receivable 200,000 210,000 Inventory, 1/1 70,000 50,000 Investment in Shaw, Inc. 400,000 Plant Assets 300,000 200,000 Dividends Declared 35,000 22,000 Purchases 240,000 150,000 Selling Expenses 28,000 20,000 Other Expenses 15,000 13,000 $1,368,350 $752,000 Accounts and Notes Payable $ 99,110 $ 38,000 Other Liabilities 45,000 15,000 Common Stock, $10 par 150,000 100,000 Other Contributed Captital 279,000 149,000 Retained Earnings, 1/1 225,000 170,000 Sales 550,000 280,000 Dividend Income 20,240 $1,368,350 $752,000 Inventory balances on December 31, 2012, were $25,000 for Place and $15,000 for Shaw, Inc. Shaw's accounts and notes payable contain a $15,000 note payable to Place, Required: Prepare a workpaper for the preparation of consolidated financial statements on December 31, 2012. The differ- ence between book value of equity acquired and the value implied by the purchase price relates to subsidiary land, which is included in plant assets
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