Exercise $3($LO $2)$ Equity method, first year, eliminations, statements. Parker

Company acquires an $80\%$ interest in Sargent Company for $$300,000$ in cash on January $1,$

$2015,$ when Sargent Company has the following balance sheet:

The excess of the price paid over book value is attributable to the fixed assets, which have a

fair value of $$250,000,$ and to goodwill. The fixed assets have a $10-$year remaining life. Parker

Company uses the simple equity method to record its investment in Sargent Company.

The following trial balances of the two companies are prepared on December $31,2015$:

Prepare a determination and distribution of excess schedule $($a value analysis is not needed$)$

for the investment.

Prepare all the eliminations and adjustments that would be made on the $2015$ consolidated

worksheet.

Prepare the $2015$ consolidated income statement and its related income distribution

schedules.

Prepare the $2015$ statement of retained earnings.

Prepare the $2015$ consolidated balance sheet.