For this practice workbook I seem to be using the wrong formula. I am looking for an individual who is proficient in this area to show me how the answers are found longhand. I wish to use this template to assist me in knowing how they are solved correctly.

Assessment 1: Accounting for Equity Investments Exercise 1 Worksheet: Journal Entries On January 1, 2015, the Parker Corporation acquired 10% of Simon Inc. for $420,000, even though Simon's book value on January 1 was $3,400,000. Simon held land on its books that was undervalued by $200,000. In 2015, Simon earned $480,000 in net income and paid cash dividends of $180,000. Parker acquired an additional 30% of Simon January 1, 2016, for $1,200,000. Simon's land remained undervalued as of that date by $240,000. Any excess cost was ascribed to a trademark with a life of 10 years for the first acquisition and a life of nine years for the second acquisition. Because fair values were not readily available, Parker maintained the initial investment of 10% at cost. The equity method will now be applied. In 2016, Simon reported $600,000 in income and $220,000 of distributed dividends. Complete steps 1 and 2 below. Step 1: Restate the 2015 purchase to the equity method in Tables 1, 2, and 3. Table 1: First Purchase - January 1, 2015 This cell intentionally left blank. Table 2: Book Value: Simon - January 1, 2016 (Before Second Purchase) This cell intentionally left blank. Table 3: Second Purchase - January 1, 2016 This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona Step 2: Record the 2016 journal entries for Parker, using Tables 4-8 below. Table 4: Entry 1 - To Record the Second Acquisition of Simon Stock Account Debit Credit This cell intentionally left blank. Table 5: Entry 2 - To Restate Reported Figures for 2015 to the Equity Method for Comparability Account Debit Credit Debit Credit This cell intentionally left blank. Table 6: Entry 3 - To Record Income for the Year Account This cell intentionally left blank. Table 7: Entry 4 - To Record the Collection of Dividends From Simon Account Debit Credit This cell intentionally left blank. Table 8: Entry 5 - To Record Amortization for 2016 Account End of Worksheet Debit Credit Assessment 1: Accounting for Equity Investments Exercise 2 Worksheet: Consolidated Balance Sheet On December 31, 2015, the Penn Corporation purchased all of Southern Company's outstanding shares for $990,000 in cash. Penn will operate Southern as a wholly-owned subsidiary that has a separate legal and accounting identity. Many of Southern's book values approximate fair values, but the fair values of some accounts differ from the book values. Additionally, Southern is carrying unrecorded, internally developed assets on its books. In determining the purchase price, Penn evaluated the differences between Southern's fair values and its book values, as shown in the table below. Table 1: Southern's Fair Values and Book Values Account Book Values Fair Values Computer software Equipment Client contracts $ $ $ 40,000 $ 80,000 $ - $ This cell intentionally left blank. 140,000 This cell intentionally left blank. 60,000 This cell intentionally left blank. 200,000 This cell intentionally left blank. In-process research and development Notes payable $ $ - $ (120,000) $ 80,000 This cell intentionally left blank. (130,000) This cell intentionally left blank. The financial information available for consolidation, as of December 31, 2015, is shown in the table below. Table 2: Financial Information Available for Consolidation Account Penn Southern Cash Receivables Inventory Investment in Southern Computer software Buildings (net) Equipment (net) Client contracts Research and development asset Goodwill Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total liabilities and equities $ $ $ $ $ $ $ $ $ $ 72,000 232,000 280,000 990,000 420,000 1,190,000 616,000 - $ $ $ $ $ $ $ $ $ $ $ 3,800,000 $ 36,000 104,000 180,000 40,000 260,000 80,000 - This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. 700,000 This cell intentionally left blank. $ $ $ $ $ (176,000) (1,020,000) (760,000) (340,000) (1,504,000) $ $ $ $ $ (50,000) This cell intentionally left blank. (120,000) This cell intentionally left blank. (200,000) This cell intentionally left blank. (50,000) This cell intentionally left blank. (280,000) This cell intentionally left blank. $ (3,800,000) $ (700,000) This cell intentionally left blank. Prepare a consolidated balance sheet for Penn and Southern, as of December 31, 2015, using Tables 3, 4, and 5 below. Table 3: Consolidated Balance Sheet Calculations 1 Account Column 1 Column 2 This cell intentionally left blank. Consideration transferred at fair value Book value Excess fair over book value This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. Allocation of excess fair value to specific assets and liabilities: computer software equipment client contracts This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. in-process research and development to notes payable Goodwill This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. Table 4: Consolidated Balance Sheet Calculations 2 Account Penn Cash Receivables Inventory Investment in Southern Computer software Buildings (net) Equipment (net) Client contracts Research and development asset Goodwill Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total liabilities and equities Southern Debit Credit Consolidated Table 5: Consolidated Balance Sheet Penn Company and Subsidiary Consolidated Balance Sheet December 31, 2015 Assets Cash Receivables Inventory Computer software Buildings (net) Equipment (net) Client contracts This cell intentionally left blank. Research and development asset Goodwill Total assets End of Worksheet This cell intentiona Liabilities and Owners' Equity Accounts payable Notes payable This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. This cell intentionaCommon stock Additional paid-in capital Retained earnings This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona This cell intentiona Total liabilities and equities This cell intentiona Assessment 1: Accounting for Equity Investments Exercise 3 Worksheet: Consolidated Balances On January 1, 2015, Pueblo Corporation purchased all of Spartan Company's outstanding stock for $1,200,000 cash. On that date, Spartan's accounting records showed net assets of $940,000, even though equipment, with a life of 10 years, was undervalued on the books by $180,000. The life of recognized goodwill is considered to be indefinite. Spartan reported $180,000 net income in 2015 and $200,000 in 2016. The subsidiary paid dividends of $40,000 for each year. Financial figures are shown in Table 1 below for the year ending December 31, 2017. Credit balances are indicated in parentheses. Table 1: Financial Figures for Year Ending December 31, 2017 Account Pueblo Revenues Cost of goods sold Depreciation expense Investment income Net income Dividends paid Retained earnings, December 31, 2017 Current assets Investment in subsidiary Equipment (net) Buildings (net) Land Total assets Liabilities Common stock Retained earnings Total liabilities and equity $ $ $ $ $ $ $ $ $ $ $ $ (1,600,000) 200,000 600,000 (40,000) (840,000) 240,000 (2,800,000) 600,000 1,200,000 1,800,000 1,600,000 1,200,000 Spartan $ $ $ $ $ $ $ $ $ $ $ $ (1,200,000) 300,000 700,000 (200,000) 40,000 (800,000) 200,000 1,200,000 800,000 200,000 $ 6,400,000 $ 2,400,000 $ $ $ (1,800,000) $ (1,800,000) $ (2,800,000) $ (1,000,000) (600,000) (800,000) $ (6,400,000) $ (2,400,000) Answer Questions 1-5 below. 1. Determine consolidated balances, as of December 31, 2017, of the accounts listed below. Account Depreciation expense Dividends paid Revenues Equipment Buildings Goodwill Common stock Balance 2. How does the accounting method chosen by the parent company for its investment affect the consolidated balances computed for the accounts listed in question 1? (Use this cell for your answer to question 2.) 3. Which accounting method for Spartan is Pueblo using for internal reporting? (Use this cell for your answer to question 3.) 4. If Pueblo had used a different accounting method for this particular investment, how could you identify the method used? (Use this cell for your answer to question 4.) 5. For each of the accounting methods listed below, determine Pueblo's retained earnings balance as of January 1, 2017. Method Balance Initial value method Partial equity method Equity method End of Worksheet