Go 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, se Number 2015, when Sargent Company has the following balance sheet: Assets Liabilities and Equity Current assets $100,000 Current liabilities $ 50,000 Depreciable fixed assets (net) 200,000 Common stock ($10 por) 100,000 Retoined earnings .. 150,000 Total assets $300,000 Total liabilities and equity $300,000 The excess of the price paid over book value is attributable to the fixed assets, which have a 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 The following trial balances of the two companies are prepared on December 31, 2015: Porker Sorgent Current Assets 10,000 130,000 Depreciable Fixed Assets 400,000 200,000 Accumulated Depreciation (106,000) 120,000 Investment in Sargent Company 316,000 Current Liabilities 160,000 (40,000) Common Stock ($10 por) 1300,000 7100,000) 1200,000) 1150,000) Retained Earnings, January 1, 2015 (150,000) 1100,000 Sales 110,000 75.000 Expenses (20,0001 Subsidiary Income 5,000 Dividends Declared 0 0 W Sargent 130,000 200,000 120,0001 EN 1 Current Assels Depreciable Fixed Assets Accumulated Depreciation Investment in Sargent Company Current Liabilities Common Stock ($10 par) Retoined Earnings, January 1, 2015 Sales Expenses Subsidiary Income Dividends Declared Totals Parker 10,000 400,000 (106,000) 316,000 160,000) (300,000) (200,000) (150,000) 110,000 (20,000) 41 (40,000) (100,000) (150,000) 1100,000 75,000 5,000 0 0 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. TI