Assignment 3 Olson Corporation paid $62,000 to acquire 100% of Towing Corporation's outstanding voting common stock at book value on May 1, 2011. The stockholders' equity of Towing on January 1, 2011 consisted of $40,000 Capital Stock and $20,000 Retained Earnings. Towing's total dividends for 2011 were $6,000, paid equally on April 1 and October 1. Towing's net income was earned uniformly throughout 2011. In 2011, pre-acquisition sales were $10,000 and pre-acquisition expenses were cost of sales for S5,000. (There were no other pre-acquisition expenses in 2011.) During 2011, Olson made sales of S10,000 to Towing at a gross profit of $3,000. One-half of this merchandise was inventoried by Towing at year-end, and one-half of the 2011 intercompany sales were unpaid at year-end 2011.Olson sold equipment with a ten-year remaining useful life to Towing at a $2.000 gain on December 31, 2011. The straight-line depreciation method is used by both companies. The equipment has no salvage value. Financial statements of Olson and Towing Corporations for 2011 appear in the first two columns of the partially completed consolidation working papers. Required: Compute all missing and required information, then complete the consolidating working papers for Olson Corporation and Subsidiary for the year ending December 31, 2011 I SO of Sales Depreciate Retained Earnings 11 000 2.000 Katedra 1231 BALANCE SHEET Top OS A payable 35.000 10.000 0.000.000 75.000 .000 Retained a None TOTAL LIAR & EQUITY 10,000 l Assignment 3 Olson Corporation paid $62,000 to acquire 100% of Towing Corporation's outstanding voting common stock at book value on May 1, 2011. The stockholders' equity of Towing on January 1, 2011 consisted of $40,000 Capital Stock and $20,000 Retained Earnings. Towing's total dividends for 2011 were $6,000, paid equally on April 1 and October 1. Towing's net income was earned uniformly throughout 2011. In 2011, pre-acquisition sales were $10,000 and pre-acquisition expenses were cost of sales for S5,000. (There were no other pre-acquisition expenses in 2011.) During 2011, Olson made sales of S10,000 to Towing at a gross profit of $3,000. One-half of this merchandise was inventoried by Towing at year-end, and one-half of the 2011 intercompany sales were unpaid at year-end 2011.Olson sold equipment with a ten-year remaining useful life to Towing at a $2.000 gain on December 31, 2011. The straight-line depreciation method is used by both companies. The equipment has no salvage value. Financial statements of Olson and Towing Corporations for 2011 appear in the first two columns of the partially completed consolidation working papers. Required: Compute all missing and required information, then complete the consolidating working papers for Olson Corporation and Subsidiary for the year ending December 31, 2011 I SO of Sales Depreciate Retained Earnings 11 000 2.000 Katedra 1231 BALANCE SHEET Top OS A payable 35.000 10.000 0.000.000 75.000 .000 Retained a None TOTAL LIAR & EQUITY 10,000 l