EXERCISES 1. Python Corporation buys 80 percent of Shark Company on January 1, 2013, for $150,000. At the time, Shark's common stock was $100,000 and retained earnings totaled $80,000. It was determined that Shark's assets and liabilities were all at their fair value except for land. The trial balances of Python and Shark on December 31, 2013, are listed below. Shark Company Debit Credit $ 10,000 11,000 9,000 185,000 80,000 Cash Receivables (net) Inventory, January 1 Investment in S Plant and equipment (net Land Accounts payable Other liabilities Common stock ($10 par) Retained earnings, January 1 Dividends declared Sales Dividend income Purchases Expenses Python Corporation Debit Credit $ 25,000 10,000 15,000 150,000 225,000 100,000 $ 24,000 80,000 250,000 135,000 15,000 130,000 16,000 55,000 40,000 $635,000 $635.000 $ 10,000 100,000 100,000 80,000 20,000 75,000 25,000 25,000 $365,000 $365.000 Inventory, December 31 $12,000 $10,000 A. Find the difference between implied and book value B. Record the entries in Python's books to reflect its transactions with Shark in 2013, assuming the cost method. To record initial investment To record P's share of S's dividends C. Prepare the workpaper entries on December 31, 2013 To eliminate P's share of S's equity EXERCISES 1. Python Corporation buys 80 percent of Shark Company on January 1, 2013, for $150,000. At the time, Shark's common stock was $100,000 and retained earnings totaled $80,000. It was determined that Shark's assets and liabilities were all at their fair value except for land. The trial balances of Python and Shark on December 31, 2013, are listed below. Shark Company Debit Credit $ 10,000 11,000 9,000 185,000 80,000 Cash Receivables (net) Inventory, January 1 Investment in S Plant and equipment (net Land Accounts payable Other liabilities Common stock ($10 par) Retained earnings, January 1 Dividends declared Sales Dividend income Purchases Expenses Python Corporation Debit Credit $ 25,000 10,000 15,000 150,000 225,000 100,000 $ 24,000 80,000 250,000 135,000 15,000 130,000 16,000 55,000 40,000 $635,000 $635.000 $ 10,000 100,000 100,000 80,000 20,000 75,000 25,000 25,000 $365,000 $365.000 Inventory, December 31 $12,000 $10,000 A. Find the difference between implied and book value B. Record the entries in Python's books to reflect its transactions with Shark in 2013, assuming the cost method. To record initial investment To record P's share of S's dividends C. Prepare the workpaper entries on December 31, 2013 To eliminate P's share of S's equity