HW 4-5 On January 1, 2016, Plank Company purchased 80% of the outstanding capital stock of Scoba Company for $53,000. At that time, Scoba's stockholder's equity consisted of capital stock of $55,000; other contributed capital, $5,000 and retained earnings of $4,000. On December 31, 2020, the two companies trial balances were shown below. The accounts payable of Scoba Company include a $3,000 payable to Plank Company A. What method s being used by Plank to account for its investment in Scoba Company? How can you tell? B. Prepare a consolidated statements workpaper at December 31, 2020. Any difference between book value and the value implied by the purchase price relates to subsidiary land. Plank Company and Subsidiary Consolidated Statements Workpaper For the Year Ended December 31, 2020 Plank Scoba Company Company Noncontrolling Consolidated Interest Balance Eliminating Entries 50,000 Income Statement Sales Equity Income Total Revenue Cost of Goods Sold Other Expenses Total Cost and Expense Net Income Noncontrolling Interest Net Income to Retained Earnings 105,000 14,400 119,400 85,400 10,000 95,400 24,000 50,000 20,000 12,000 32,000 18,000 24,000 18,000 48,800 Retained Earnings Statement Retained Earnings 1/1 Plank Company Scoba Company Net Income from Above Dividends Declared Plank Company Scoba Company Retained Earnings 12/31 24,000 15,000 18,000 (10,000) (8,000) 25,000 62,800 Balance Sheet Cash Accounts Receivable Inventory 12/31 Investment in Scoba 42,000 21,000 15,000 69,800 22,000 17,000 8,000 Difference b/w Implied & Book Value Land 52,000 Total 199,800 48,000 95,000 12,000 5,000 6,000 4,000 100,000 55,000 Accounts Payable Other Liabilities Common Stock Plank Company Scoba Company Other Contributed Capital Plank Company Scoba Company Retained Earnings from Above 1/1 Noncontrolling Interest 12/31 Noncontrolling Interest Total 20,000 5,000 25,000 62,800 199,800 95,000 HW 4-5 On January 1, 2016, Plank Company purchased 80% of the outstanding capital stock of Scoba Company for $53,000. At that time, Scoba's stockholder's equity consisted of capital stock of $55,000; other contributed capital, $5,000 and retained earnings of $4,000. On December 31, 2020, the two companies trial balances were shown below. The accounts payable of Scoba Company include a $3,000 payable to Plank Company A. What method s being used by Plank to account for its investment in Scoba Company? How can you tell? B. Prepare a consolidated statements workpaper at December 31, 2020. Any difference between book value and the value implied by the purchase price relates to subsidiary land. Plank Company and Subsidiary Consolidated Statements Workpaper For the Year Ended December 31, 2020 Plank Scoba Company Company Noncontrolling Consolidated Interest Balance Eliminating Entries 50,000 Income Statement Sales Equity Income Total Revenue Cost of Goods Sold Other Expenses Total Cost and Expense Net Income Noncontrolling Interest Net Income to Retained Earnings 105,000 14,400 119,400 85,400 10,000 95,400 24,000 50,000 20,000 12,000 32,000 18,000 24,000 18,000 48,800 Retained Earnings Statement Retained Earnings 1/1 Plank Company Scoba Company Net Income from Above Dividends Declared Plank Company Scoba Company Retained Earnings 12/31 24,000 15,000 18,000 (10,000) (8,000) 25,000 62,800 Balance Sheet Cash Accounts Receivable Inventory 12/31 Investment in Scoba 42,000 21,000 15,000 69,800 22,000 17,000 8,000 Difference b/w Implied & Book Value Land 52,000 Total 199,800 48,000 95,000 12,000 5,000 6,000 4,000 100,000 55,000 Accounts Payable Other Liabilities Common Stock Plank Company Scoba Company Other Contributed Capital Plank Company Scoba Company Retained Earnings from Above 1/1 Noncontrolling Interest 12/31 Noncontrolling Interest Total 20,000 5,000 25,000 62,800 199,800 95,000