Assignment 3 Olson Corporation paid $62,000 to acquire all 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 $5,000. (There were no other pre-acquisition expenses in 2011.) During 2011. Olson made sales of $10,000 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. Elmon solidated Olson Twing Debit Credit INCOME STATEMENT Sales income of Towing 80.000 $40,000 Gain on sale of equipment Kot of Sales and expenses Deprecate experie Netice Retained Earnings 1/1 Aal Net income Less: Dividends Retained Earnings 12/31 (52.500 21.000) 11,000 4.000 25.000 15.000 60,000 20,000 25.000 15.000 10.000 6 75,00 29,000 BALANCE SHEET Receivables.net 19.000 TO ventories 20.500 22.000 Buildings.net 25.000 400D 22.000 Imetent in Towing TOTAL ASSETS 1970.000 80,000 TOTAL ASSETS 100 recounts payable 150 11,000 Capital Stock DOO 40.000 Retained Gaming 75 000 29.000 1201 Non-control Interest TOTAL LIAB & EQUITY 170.000 S 80.000 Assignment 3 Olson Corporation paid $62.000 to acquire all of Towing Corporation's outstanding voting common stock at book value on May 1, 2011. The stockholders' equity of Towing on Jarmry 1. 2011 consisted of $40.000 Capital Stock and S20.000 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 tiniformly throughout 2011. In 2011, pre-acquisition sales were $10,000 and pre- acquisition expenses were cost of sales for $5.000. (There were no other pre-acquisition expenses in 2011.) During 2011. Olson made sales of $10,000 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. Eliminations Consolidated Olson Towing Debit Credit INCOME STATEMENT Sales 80,000 $40,000 Income of Towing Gain on sale of equipment Cost of Sales and expenses (52.500 21.000) Depreciation expense 11.000 4.000 Net income 25,000 15,000 Retained Earnings 1/1 60,000 20,000 Add: Net income 25.000 15,000 Less: Dividends 10,000) 6,000) Retained Earnings 12/31 75,000 29,000 BALANCE SHEET Receivables - net 19.000 16,000 Inventories 20.500 22.000 Buiklings-net 25,000 20,000 Equipment - net 40,000 22,000 Investment in Towing TOTAL ASSETS 170 ann .. Accounts payable 35.000 11.000 Capital Stock 60,000 40,000 Retained Earnings 75,000 29.000 12/31 Non-control. Interest TOTAL LIAB. & EQUITY 170,000 $80,000 Assignment 3 Olson Corporation paid $62,000 to acquire all 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 $5,000. (There were no other pre-acquisition expenses in 2011.) During 2011. Olson made sales of $10,000 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. Elmon solidated Olson Twing Debit Credit INCOME STATEMENT Sales income of Towing 80.000 $40,000 Gain on sale of equipment Kot of Sales and expenses Deprecate experie Netice Retained Earnings 1/1 Aal Net income Less: Dividends Retained Earnings 12/31 (52.500 21.000) 11,000 4.000 25.000 15.000 60,000 20,000 25.000 15.000 10.000 6 75,00 29,000 BALANCE SHEET Receivables.net 19.000 TO ventories 20.500 22.000 Buildings.net 25.000 400D 22.000 Imetent in Towing TOTAL ASSETS 1970.000 80,000 TOTAL ASSETS 100 recounts payable 150 11,000 Capital Stock DOO 40.000 Retained Gaming 75 000 29.000 1201 Non-control Interest TOTAL LIAB & EQUITY 170.000 S 80.000 Assignment 3 Olson Corporation paid $62.000 to acquire all of Towing Corporation's outstanding voting common stock at book value on May 1, 2011. The stockholders' equity of Towing on Jarmry 1. 2011 consisted of $40.000 Capital Stock and S20.000 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 tiniformly throughout 2011. In 2011, pre-acquisition sales were $10,000 and pre- acquisition expenses were cost of sales for $5.000. (There were no other pre-acquisition expenses in 2011.) During 2011. Olson made sales of $10,000 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. Eliminations Consolidated Olson Towing Debit Credit INCOME STATEMENT Sales 80,000 $40,000 Income of Towing Gain on sale of equipment Cost of Sales and expenses (52.500 21.000) Depreciation expense 11.000 4.000 Net income 25,000 15,000 Retained Earnings 1/1 60,000 20,000 Add: Net income 25.000 15,000 Less: Dividends 10,000) 6,000) Retained Earnings 12/31 75,000 29,000 BALANCE SHEET Receivables - net 19.000 16,000 Inventories 20.500 22.000 Buiklings-net 25,000 20,000 Equipment - net 40,000 22,000 Investment in Towing TOTAL ASSETS 170 ann .. Accounts payable 35.000 11.000 Capital Stock 60,000 40,000 Retained Earnings 75,000 29.000 12/31 Non-control. Interest TOTAL LIAB. & EQUITY 170,000 $80,000