Flounder purchased 100% of Sole for $325,000 on Jan 1, 2020. On that date, Equipment was considered undervalued by $60,000 and had a five year life, and Other Intangibles were overvalued by $10,000 and had a four year life Book Value of Sole on that date was $150,000. Goodwill accounts for the rest of the excess.

Below are the income and dividends for 2020 for Sole as reported by Sole:

2020

Income $ 50,000

Dividends $ 10,000

a. Prepare a schedule of distribution of excess of cost/fair value at Jan 1, 2020 and any amortization of assets:

b. Using the equity method, record the entries on the books of Flounder below to reflect activity with Sole for 2020, including the original purchase.

c. Below are the balances of the accounts for Flounder and Sole at December 31, 2020. Prepare consolidation entries on the worksheet and complete the consolidated statements.

***You must complete the Flounder balance sheet first.***

Sole Dr Cr Consol Sales Cost of Sales Operating Expenses Flounder 200,000 60,000 185,000 70,000 65,000 50,000 15,000 125,000 Income from Sole Net Income $ 50,000 80,000 Retained Earnings Jan 1 Dividends Retained Earnings Dec 31 300,000 30,000 10,000 120,000 Cash Accounts Receivable Inventories 20,000 30,000 90,000 10,000 5,000 20,000 Investment in Sole 220,000 190,000 Property, Plant & Equipment net of depreciation Goodwill Other Intangibles 15,000 30,000 745,500 240,000 Accounts Payable Long Term Notes Payable 90,000 70,000 25,000 25,000 Common Stock 150,000 70,000 Retained Earnings 120,000 745,500 240,000