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: Assets Liabilities and Equity Current assets . ...$100,000 Depreciable fixed assets (net) Current liabilities 50,000 150,000 . . ..$300,000 The excess of the price paid over book value is attributable to the fixed assets, which have a Retained earnings Total liabilities and equity 300,000 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 e following trial balances of the two companies are prepared on December 31, 2015 Parker Current Assets 130,000 10,000 400,000 200,000 (106,000)(20,000) 316,000 (60,000 (40,000) 300,000 (100,000 Accumulated Depreciation Investmentin Sargent Company . Common Stock ($10 par).... Retained Earnings, January 1,2015.... Sales .200,000 (150,000) 75,000 5,000 (150,000) (100,000) 110,000 penses Subsidiary Income Dividends Declared (20,000 1. Prepare a determination and distribution of excess schedule (a value analysis is not needed) for the investment. 2. Prepare all the eliminations and adjustments that would be made on the 2015 consolidated worksheet. 3. Prepare the 2015 consolidated income statement and its related income distribution schedules. 4. Prepare the 2015 statement of retained earnings. 5. Prepare the 2015 consolidated balance sheet