I have attached both he question and the excel file that is to be filled out. I have competed a majority of it but need help with the remaining areas.

Thanks!

On January 1, 2014, Pontiac Company acquired an 80% interest in the common stock of Stark Company for $400,000. Stark had the following balance sheet on the date of acquisition: Stark Company Balance Sheet January 1, 2014 Assets Liabilities and Equity Accounts receivable $ 40,000 Accounts payable $ 42,297 Inventory 20,000 Bonds payable 100,000 Land 35,000 Discount on bonds payable (2,297) Buildings 250,000 Common stock ($10 par) 10,000 Accumulated depreciation (50,000) Paid-in capital in excess of par 90,000 Equipment 120,000 Retained earnings 115,000 Accumulated depreciation (60,000) Total assets $355,000 Total liabilities and equity $355,000 Buildings (20-year life) are undervalued by $80,000. Equipment (5-year life) is undervalued by $50,000. Any remaining excess is considered to be goodwill. Stark issued $100,000 of 8%, 10-year bonds for $96,719 on January 1, 2011. Annual interest is paid on December 31. Pontiac purchased the bonds on January 1, 2015, for $104,770. Both companies use the straight-line method to amortize the premium/discount on the bonds. Pontiac and Stark used the following bond amortization schedules: Stark Pontiac Period 1/2011 1/2012 1/2013 1/2014 1/2015 1/2016 1/2017 1/2018 1/2019 1/2020 1/2021 Cash Interest $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,328 8,328 8,328 8,328 8,328 8,328 8,328 8,328 8,328 8,328 Balance $ 96,719 97,047 97,375 97,703 98,031 98,359 98,687 99,015 99,343 99,671 100,000 Period 1/2011 1/2012 1/2013 1/2014 1/2015 1/2016 1/2017 1/2018 1/2019 1/2020 1/2021 Cash Interest Balance $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 7,205 7,205 7,205 7,205 7,205 7,205 104,770 103,975 103,180 102,385 101,590 100,795 $100,00 0 Refer to the preceding facts for Pontiac's acquisition of 80% of Starks common stock and the bond transactions. Pontiac uses the simple equity method to account for its investment in Stark. On January 1, 2015, Stack held merchandise acquired from Pontiac for $15,000. During 2015, Pontiac sold $50,000 worth of merchandise to Stark. Stark held $20,000 of this merchandise at December 31, 2015. Stark owed Pontiac $10,000 on December 31 as a result of these intercompany sales. Pontiac has a gross profit rate of 30%. Pontiac and Stark had the trial balances on December 31, 2015, shown on next page. Cash Accounts Receivable Inventory Land Investment in Stark Investment in Stark Bonds Buildings Accumulated Depreciation Equipment Accumulated Depreciation Accounts Payable Bonds Payable Discount on Bonds Payable Common Stock Paid-In Capital in Excess of Par Retained Earnings, January 1, 2015 Sales Cost of Goods Sold Depreciation ExpenseBuildings Depreciation ExpenseEquipment Other Expenses Interest Revenue Pontiac Company 17,870 90,000 100,000 150,000 435,738 103,975 500,000 (300,000) 200,000 (100,000) (55,000) (100,000) (600,000) (400,000) (600,000) 410,000 30,000 15,000 109,360 (7,205) Stark Company 32,031 60,000 30,000 45,000 250,000 (70,000) 120,000 (84,000) (25,000) (100,000) 1,641 (10,000) (90,000) (145,000) (220,000) 120,000 10,000 12,000 45,000 Interest Expense Subsidiary Income Divedends Declared Totals 8,328 (19,738) 20,000 0 10,000 0 Prepare the worksheet necessary to produce the consolidated financial statements for Pontiac Company and its subsidiary Stark Company for the year ended December 31, 2015. Include the determination and distribution of excess and income distribution schedules. Name of Company Being Acquired Stark Company Name of Acquiring Company Pontiac Company Date of Acquisition January 1,2014 Date of Acquisition Stark Company Book Market Assets Cash Accounts Receivable 40,000 Inventory 20,000 Life 40,000 20,000 Investment in Subsidiary Intercompany Bond Investment Land Buildings Accumulated Depreciation Equipment Accumulated Depreciation 35,000 250,000 (50,000) 120,000 (60,000) 35,000 330,000 20 170,000 5 Total Assets 355,000 595,000 Liabilities Accounts Payable (42,297) (42,297) Bonds Payable Discount on Bonds Payable (100,000) 2,297 (100,000) Total Liabilities Equity Acquired Company Common Stock Paid-in Capital in Excess of Par Retained Earnings (140,000) (142,297) Goodwill Equity Acquiring Company Common Stock Paid-in Capital in Excess of Par Retained Earnings Total Equity (10,000) (90,000) (115,000) (215,000) Total Liabilities and Equity (355,000) Net Assets at Market of Acquired Co. Dividends Declared Acquired Company Dividends Declared Acquiring Company Sales Cost of Goods Sold Depreciation Expense of Buildings Equipment Amortization Expense of Other Expenses Interest Expense Gain on Sale of Assets Interest Revenue Subsidiary Income Total Balances Purchase Price Cash 400,000 Number of shares exchanged Par value of a share of stock Market value of a share of stock Market value of stock exchanged Total purchase price 400,000 Ownership Interest enter as . 7 for 70% 1.00 Goodwill Applicable to NCI Implied Value of NCI Interest - Estimated Value of NCI interest if not the implied proportional amount--Enter amount or 0 - Method of Accounting for Investment--Enter Capital C for Cost or Capital E for Equity E 452,703 Years since Acquisition 1.00 Intercompany Merchandise Information Parent Sales Current Year Sales Unpaid Account Balance, at year end Beginning Inventory Ending Inventory Subsidiary Sales Parent % 15,000 20,000 30.00 30.00 4,500 6,000 Intercompany Fixed Asset Sales By Parent Type of Fixed Asset--Enter in Columns B or C Enter 1 for Land Enter 2 for Buildings Enter 3 for Equipment Profit Amount Life of Asset--leave blank for land Year of Sale (Assume Beginning of Year) Intercompany Bond Information Maturity Value Face Interest Rate (Enter .08 for 8%,.075 for 7.5%) Original Years to Maturity Year Bond Issued (Assume January Issuance) Issue Rate Year Bond Purchased (Assume January Purchase)) Purchase Rate (if effective interest amortization) Face Value Purchased Method of Amortization (Enter capital S for Straight-line and capital E for Effective Interest in Column B.) Issue Price Purchase Price If the bonds were purchased the current year enter 1. If the bonds were purchased in a previous year enter 2. Month Interest Paid January =1, December=12) By Sub Value Analysis Company Fair Value Parent Price NCI Value 400,000 400,000 Company Fair Value Fair Value of Net Assets Excluding Goodwill Goodwill Gain on Acquisition 452,703 52,703 452,703 - - Determination and Distribution of Excess Schedule Implied Company Value Parent Price NCI Value 400,000 400,000 Fair Value of Company Less Book Value of Interest Acquired Common Stock Paid-in Capital in Excess of Par Retained Earnings Total Equity (10,000) (90,000) (115,000) (215,000) Interest Acquired Book Value Excess of Fair Value over Book Value 1.00 (215,000) 0.00 - 185,000 Elimination Entry Common Stock Paid-in Capital in Excess of Par Retained Earnings Investment in Subsidiary 90,000 115,000 Debit (Credit) - Land Buildings Equipment Goodwill Bonds Payable Discount on Bonds Payable - 130,000 110,000 (2,297) (185,000) Key EL 10,000 Adjustment to Identifiable Accounts Inventory Investment in Subsidiary - EL EL (215,000.00) EL Key D D D D D D D D D D D D D Life 20 5 - Gain Taken to Acquiring Co. RE/Income Acquired Company RE Check (52,703.00) D - D - Amortization Schedule Account Adjustment Annual Amount Inventory Buildings Equipment Current Year Prior Years 6,500 6,500 0 22,000 22,000 0 28,500 0 Discount on Bonds Payable Total Amortization Entry Debit (Credit) Cost of Goods Sold Depreciation Expense of Buildings 6,500 Equipment 22,000 Amortization Expense of Interest Expense Acquired Company RE Acquiring Company RE Inventory Accumulated Depreciation Accumulated Depreciation Discount on Bonds Payable Total Method Adjustment Schedule Is Adjustment Necessary? Adjustment to Investment Account Adjustment to Retained Earnings Account Date Alignment Schedule Key A A A A A A A A A - A - A - A (6,500) A (22,000) A - A - A - A - A - A - Debit (Credit) NO Key - CV - CV Debit (Credit) Key Adjustment to Subsidiary Income Account Adjustment to Subsidiary Dividend Account Adjustment to Investment Account under Equity Method 19,738 CY (10,000) CY (9,738) CY Intercompany Inventory Profit Deferral and Intercompany Sales and Receivables. Beginning Inventory Ending Inventory Current Year Sales Year End Unpaid Account Balances Elimination Entries Eliminate Intercompany Merchandise Sales Sales Cost of Goods Sold Eliminate Intercompany unpaid trade balance at year end Accounts Payable Accounts Receivable Sold by Parent Parent % 15,000 20,000 Debit (Credit) KEY - IS - IS - IA - IA Eliminate Profit made by parent on merchandise in subsidiary's beginning inventory Retained Earnings-Parent Cost of Goods Sold 450,000 BI (450,000) BI Eliminate Profit made by parent on merchandise in subsidiary's ending inventory Cost of Goods Sold Inventory 600,000 EI (600,000) EI Eliminate Profit made by subsidiary on merchandise in parents' beginning inventory Retained Earnings-Parent - BI Retained Earnings-Subsidiary - BI 30.00 30.00 Parent Profit 450,000 600,000 Cost of Goods Sold - BI Eliminate Profit made by subsidiary on merchandise in parents' ending inventory Cost of Goods Sold Inventory - EI - EI Intercompany Fixed Asset Profit Deferral Original Profit Life of Asset Annual Depreciation Adjustment Realized in Prior Years Balance at Start of Year Realized in Current Year Sale by Parent Elimination Entry Retained Earnings Parent Gain on Sale of Asset Retained Earnings Parent Debit (Credit) Retained Earnings Subsidiary Gain on Sale of Asset Depreciation Expense Depreciation Expense Check - - Key - F - F - F F F F F F F F F Stark Company Period (First line is January 1year of issuance. Second line is December 31- year of issuance.) Cash/Payable 0 0 1 2 3 4 5 6 7 8 9 Elimination Entries - - - Intercompany Bond Eliminations Amortization Table For Sale by Sub - Debit (Credit) Interest - Balance #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Key Proof: Bonds Payable Loss Remaining at Year End - B Interest Revenue Loss (Gain) on Bond Retirement (Premium) Discount on Bonds Payable 7,205 B - B (1,641) B Retained Earnings Parent Loss Amortized During the Year 106,739 B Retained Earnings Subsidiary - B Interest Expense (8,328) B Intercompany Bond Investment (103,975) B Check Balances Interest Payable Interest Receivable - B - B Consolidated Worksheet Trial Balance Pontiac Company Stark Company Key 17,870 32,031 90,000 60,000 100,000 30,000 Cash Accounts Receivable Inventory Investment in Subsidiary Eliminations 435,738 D CV CY Intercompany Bond Investment Land 103,975 150,000 Buildings 500,000 250,000 D (300,000) (70,000) A F F 120,000 D Accumulated Depreciation Equipment 200,000 45,000 Accumulated Depreciation (100,000) - - - - - (55,000) - Goodwill Accounts Payable Bonds Payable Discount on Bonds Payable - - - Common Stock Paid-in Capital in Excess of Par Retained Earnings - Common Stock Paid-in Capital in Excess of Par Retained Earnings (100,000) - (600,000) (400,000) (84,000) A F F - D - A - D A - D A - D (25,000) IA - B (100,000) D B 1,641 D A B - D A (10,000) EL (90,000) EL (145,000) EL A BI F B A CV BI BI F F B Dividends Declared Acquired Company Dividends Declared Acquiring Company Sales Cost of Goods Sold 20,000 (600,000) 410,000 10,000 (220,000) IS 120,000 A EI EI Depreciation Expense of - - Buildings 30,000 10,000 A Equipment 15,000 12,000 A - Other Expenses Interest Expense 109,360 - Subsidiary Income Interest Revenue Gain on Sale of Assets (19,738) (7,205) - Amortization Expense of - Gain on Acquisition of Business Loss (Gain) on Bond Retirement Total Consolidated Net Income NCI Share Controlling Share NCI Realized Gain on Asset Sale Current Year Amortizations Stark Company (24,672) 28,500 0 (1,123) 2,705 2,705 Pontiac Company Internally Generated Net Income A A A - CY - B - F F Balances Gain/Loss on Bond Retirement Interest Adjustment on Bonds Adjusted (Income) or Loss NCI Share Controlling Share A B Balances Controlling Retained Earnings Income Distribution Schedules Internally Generated Net (Income) or Loss Beginning Inventory Profit Ending Inventory Profit Gain on Asset in Income 45,000 8,328 (42,845) Gain on Acquisition of Business Beginning Inventory Profit Ending Inventory Profit Gain on Asset in Income Realized Gain on Asset Sale (52,703) (450,000) 600,000 - Controlling Share of Subsidiary Total 2,705 57,157 Consolidated Net Income 57,157 Current Year Trial Balance Pontiac Company Stark Company 17,870 90,000 100,000 32,031 60,000 30,000 435,738 103,975 150,000 500,000 (300,000) 200,000 (100,000) 45,000 250,000 (70,000) 120,000 (84,000) (55,000) (25,000) (100,000) 1,641 ### ### (145,000) (100,000) (600,000) (400,000) 10,000 20,000 (600,000) 410,000 (220,000) 120,000 30,000 15,000 10,000 12,000 109,360 45,000 8,328 (7,205) (19,738) Balances Balances Subsidiary % - Total 6,500 22,000 - Sold by Subsidiary Subsidiary % Subsidiary Profit 4,500 0.00 6,000 0.00 - Pontiac Company Period Cash/Payable 0 0 1 2 3 4 5 6 7 8 9 Interest - Balance - - Investment in Bonds at End of Period Carrying Value at End of Period 103,975 -1,641 Interest Expense Eliminated Interest Revenue Eliminated 105,616 8,328 7,205 1,123 Loss (Gain) or RE Adjustment at Beginning of Period 106,739 nations Debit Credit Key 0 (600000) 0 0 0 0 0 0 130000 0 0 0 110000 IA EI EI B (245000) EL (185000) D 0 CV (9738) CY (103975) B 0 D 0 F 0 F 0 D 0 F 0 F (6500) A 0 D Consolidated Net Non Control Income Interest 0 0 0 0 0 0 0 0 0 0 F 0 F (22000) A 0 0 0 0 0 0 D A D A D A 0 0 0 D 0 0 0 0 0 0 0 10,000 0 D 90,000 145,000 0 0 0 450,000 106,739 (2297) 0 (1641) 0 0 D A B D A - 0 D 0 A 0 B 0 D 0 A 0 CV 0 B (10,000) CY (450,000) - A IS BI BI - (820,000) 680,000 600,000 - 6,500 22,000 0 0 0 0 0 0 0 A F F A F F A 0 A 0 A 19738 7205 - 0 1697182 - A (8,328) B 0 CY 46,500 49,000 154,360 - -52703 D (52,703) 0 B (1697182) 57,157 (57,157) 0 Controlling Retained Earnings Consolidated Balance Sheet 49,901 150,000 (470,000) (4,000) 195,000 880,000 (376,500) 430,000 (206,000) (80,000) (100,000) (2,297) - (100,000) (600,000) 156,739 20,000 57,157 0 233,896 233,896 Balances