Giant acquired all of Smalls common stock on January 1, 2014, in exchange for cash of $770,000 On that day, Small reported common stock of $170,000 and retained earnings of $400,000 At the acquisition date, $77,500 of the fair value price was attributed to undervalued land while $53,000 was assigned to undervalued equipment having a 10 year remaining life The $69,500 unallocated portion of the acquisition date excess fair value over book value was viewed as goodwill Over the next few years, Giant applied the equity method to the recording of this investment Following are individual financial statements for the year ending December 31, 2018 On that date, Small owes Giant $18,900 Small declared and paid dividends in the same period Credits are indicated by parentheses Giant Small Revenues $ (1,228,300 ) $ (450,500 ) Cost of goods sold 555,000 91,500 Depreciation expense 214,000 174,000 Equity in income of Small (179,700 ) 0 Net income $ (639,000 ) $ (185,000 ) Retained earnings, 1 1 18 $ (1,890,000 ) $ (644,000 ) Net income (above) (639,000 ) (185,000 ) Dividends declared 320,000 120,000 Retained earnings, 12 31 18 $ (2,209,000 ) $ (709,000 ) Current assets $ 746,500 $ 177,000 Investment in Small 1,052,500 0 Land 505,000 238,000 Buildings (net) 329,000 500,000 Equipment (net) 678,000 342,000 Goodwill 0 0 Total assets $ 3,311,000 $ 1,257,000 Liabilities $ (852,000 ) $ (378,000 ) Common stock (250,000 ) (170,000 ) Retained earnings(above) (2,209,000 ) (709,000 ) Total liabilities and equities $ (3,311,000 ) $ (1,257,000 ) Prepare a consolidation worksheet for Giant and Small for the year ending December 31, 2018 GIANT COMPANY AND SMALL COMPANY Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Consolidated Accounts Giant Small Debit Credit Totals S $ (450,500) Revenues (1,678,800) (1,228,300) 555,000 Cost of goods sold 91,500 646,500 174,000 Depreciation expense 214,000 5,300 393,300 (179,700) Equity income of Small 179,700 $ (639,000) S (185,000) (639,000) Net income $ (644,000) Retained earnings 1 1 (1,890,000) 644,000 (1,890,000) (639,000) Net income (above) (185,000) (639,000) 320,000 Dividends declared 320,000 120,000 120,000 Retained earnings $ (2,209,000) $ (709,000) (2,209,000) 12 31 746,500 904,600 Current assets S S 177,000 18,900 1,052,500 120,000 Investment in Small Land 505,000 238,000 102,500 850,500 Buildings (net) Equipment (net) 329,000 500,000 829,000 678,000 (26,500) 342,000 53,000 1,046,500 Goodwill 0 69,500 69,500 $3,311,000 $ 1,257,000 $ 3,700,100 Total assets $ (852,000) $ (378,000) Liabilities 18,900 (1,211,100) Common stock Retained earnings (above) Total liabilities and (250,000) (170,000) 170,000 (250,000) (2,209,000) (709,000) (2,209,000) $ (3,670,100) (3,311,000) 311,900 1,163,400 equity (1,257,000)

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Giant acquired all of Smalls common stock on January 1, 2014, in exchange for cash of $770,000. On that day, Small reported common stock of

Giant acquired all of Smalls common stock on January 1, 2014, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the acquisition date, $77,500 of the fair-value price was attributed to undervalued land while $53,000 was assigned to undervalued equipment having a 10-year remaining life. The $69,500 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Over the next few years, Giant applied the equity method to the recording of this investment.

Following are individual financial statements for the year ending December 31, 2018. On that date, Small owes Giant $18,900. Small declared and paid dividends in the same period. Credits are indicated by parentheses.

	Giant			Small
Revenues	$	(1,228,300	)	$	(450,500	)
Cost of goods sold		555,000			91,500
Depreciation expense		214,000			174,000
Equity in income of Small		(179,700	)		0
Net income	$	(639,000	)	$	(185,000	)
Retained earnings, 1/1/18	$	(1,890,000	)	$	(644,000	)
Net income (above)		(639,000	)		(185,000	)
Dividends declared		320,000			120,000
Retained earnings, 12/31/18	$	(2,209,000	)	$	(709,000	)
Current assets	$	746,500		$	177,000
Investment in Small		1,052,500			0
Land		505,000			238,000
Buildings (net)		329,000			500,000
Equipment (net)		678,000			342,000
Goodwill		0			0
Total assets	$	3,311,000		$	1,257,000
Liabilities	$	(852,000	)	$	(378,000	)
Common stock		(250,000	)		(170,000	)
Retained earnings(above)		(2,209,000	)		(709,000	)
Total liabilities and equities	$	(3,311,000	)	$	(1,257,000	)

Prepare a consolidation worksheet for Giant and Small for the year ending December 31, 2018

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GIANT COMPANY AND SMALL COMPANY Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Consolidated Accounts Giant Small Debit Credit Totals S $ (450,500) Revenues (1,678,800) (1,228,300) 555,000 Cost of goods sold 91,500 646,500 174,000 Depreciation expense 214,000 5,300 393,300 (179,700) Equity income of Small 179,700 $ (639,000) S (185,000) (639,000) Net income $ (644,000) Retained earnings 1/1 (1,890,000) 644,000 (1,890,000) (639,000) Net income (above) (185,000) (639,000) 320,000 Dividends declared 320,000 120,000 120,000 Retained earnings $ (2,209,000) $ (709,000) (2,209,000) 12/31 746,500 904,600 Current assets S S 177,000 18,900 1,052,500 120,000 Investment in Small Land 505,000 238,000 102,500 850,500 Buildings (net) Equipment (net) 329,000 500,000 829,000 678,000 (26,500) 342,000 53,000 1,046,500 Goodwill 0 69,500 69,500 $3,311,000 $ 1,257,000 $ 3,700,100 Total assets $ (852,000) $ (378,000) Liabilities 18,900 (1,211,100) Common stock Retained earnings (above) Total liabilities and (250,000) (170,000) 170,000 (250,000) (2,209,000) (709,000) (2,209,000) $ (3,670,100) (3,311,000) 311,900 1,163,400 equity (1,257,000)