I have attached two files. One is a question (pdf file) and the other is answer (excel worksheet). I need help with my 3 part worksheet. Investment in Bussman Stock needs to have a zero balance for its consolidated and I can't figure it out. So I would really appreciate if you could help me out.. and also let me know if you find any problem

Advanced Financial Accounting ACC 337 Comprehensive Consolidation Problem You are to complete the problem below (all requirements) in good form, showing all of your work! Deliverables: 1. A cover letter explaining to your Boss, ME, how the intercompany transfers were accounted for including the amount of income assigned to NCI; the differential and the assignment thereof; total NCI; the balance of the investment account, et cetera. Bear in mind that I am new to the firm and somewhat rusty on the consolidation of affiliate financial statements. Thus, you will need to explain this clearly, in layman's terms. The cover letter should be included as a worksheet in the excel file 2. Spreadsheet calculation, in good form, showing your work for each requirement. 3. All of the work handed in should embody the spirit of professionalism; in other words, pretend that this really is your job and therefore, you will want to make sure that your deliverables are free from immaterial as well as material errors. You may collaborate with one another on this problem in fact, I encourage it. You are limited to collaboration with only individuals who are currently enrolled in ACC 337 for the Spring 2015 semester, collaboration outside of those individuals is not allowed. However, each individual must submit HIS/HER own work. I am also more than willing to help but I will not hand-hold anyone through this project. Due Date: April 27, 2015, or as soon as you complete the assignment. Submissions are to be turned in on ReggieNet in the FileDrop. The file(s) should be named \"lastname firstname Project S15\" 1 Comprehensive Problem Topp Manufacturing Company acquired 90 percent of Bussman Corporation's outstanding common stock on December 31, 20X1, for $3,244,050. At that date, the fair value of the noncontrolling interest was $360,450, and Bussman reported common stock outstanding of $1,451,250, premium on common stock of $481,140, and retained earnings of $972,000. The book values and fair values of Bussman's assets and liabilities were equal, except for land, which was worth $319,140 more than its book value. On April 1, 20X2, Topp issued at par $540,000 of 8 percent bonds directly to Bussman; interest on the bonds is payable March 31 and September 30. On January 2, 20X3, Topp purchased all of Bussman's outstanding 10-year 14 percent bonds from an unrelated institutional investor at 97. The bonds originally had been issued on January 2, 6 years ago, for 103. Interest on the bonds is payable December 31, and June 30. Since the date it was acquired by Topp Manufacturing, Bussman has sold inventory on account to Topp on a regular basis. The amount of such intercompany sales totaled $279,045 in 20X2 and $493,290 in 20X3, including a 42 percent gross profit. All inventory transferred in 20X2 had been sold by December 31, 20X2, except inventory which Topp paid $58,725 and did not resell until January 20X3. All 20X2 inventory transactions on account had been satisfied prior the end of the year. Inventory transferred in 20X3 had been resold at December 31, 20X3, except merchandise for which Topp had paid $112,050. An account balance of $63,450 remained unpaid on 20X3 inventory transactions. On January 1, 20X2, Bussman sold equipment to Topp for $303,750. Bussman had purchased the equipment for $500,850 on January 1, 20X0, and was depreciating it on a straight-line basis with a 10-year expected life and no anticipated salvage value. The equipment's total expected life is unchanged as a result of the intercompany sale. As of December 31, 20X3, Bussman had declared but not yet paid its fourth-quarter dividend of $10,000. Both Topp and Bussman use straight-line depreciation and amortization, including the amortization of bond discount and premium. On December 31, 20X3, Topp's management evaluated the Bussman's asset fair value and determined the fair value of Bussman's net assets was $2,517,750 and the fair value of net assets excluding goodwill was $2,227,500. Any goodwill impairments should be shared proportionately between controlling and noncontrolling interests. Topp uses the basic equity method to account for its investment in Bussman. 1. Prepare all eliminating entries required to prepare a three-part consolidated working paper as of December 31, 20X3 2. Prepare and complete a three-part workpaper for the preparation of consolidated financial statements for 20X3 in good form. 2 At December 31, 20X3, trial balances for Topp and Bussman appeared as follows: Item Cash Current Receivables Inventory Investment in Bussman Stock Investment in Bussman Bonds Investment in Topp Bonds Land Building and Equipment Cost of Goods Sold Depreciation and Amortization Other Expenses Dividends Declared Accumulated Depreciation Current Payables Bonds Payable Premium on Bonds Payable Common Stock Premium on Common Stock Retained Earnings, January 1 Sales Other Income Income from Subsidiary Total Topp Manufacturing Debit Credit 57,510 197,505 360,450 3,858,284 3,299,063 Bussman Corporation Debit Credit 386,573 332,822 535,275 540,000 4,077,027 2,722,073 1,147,682 400,275 414,923 492,750 2,515,725 4,407,750 4,963,316 360,450 1,138,928 168,750 2,219,171 140,940 540,000 1,303,223 339,529 3,375,000 30,375 1,451,250 481,140 1,022,000 2,799,225 247,658 2,276,370 2,207,291 4,085,100 8,581,140 319,144 958,574 21,237,729 21,327,729 11,049,399 11,049,399 3 Topp Manufacturing Co. Eliminating Entries 4/23/2015 Eliminating Entries WP JE Debit Credit Goodwill Impairment Loss Income from Bussman Income to NCI F A A 1 1 1 90,720 Land Goodwill Investment in Bussman Stock NCI A A A A 2 2 2 2 319,140 290,250 Common Stock Premium on Common Stock Retained Earnings Investment from Bussman Stock NCI B B B B B 3 1,451,250 3 481,140 3 1,022,000 3 2,658,951 3 295,439 Income from Bussman Stock Dividends Declared Investment from Bussman Stock B B B 4 4 4 975,603 Income to NCI Dividends Declared - NCI NCI B B B 5 5 5 108,400 Bonds Payable Investment in Topp Bonds C C 6 6 540,000 Other Income (Interest) Other Expenses (Interest) C C 7 7 43,200 A/P C C 8 8 10,800 Bonds Payable Premium on Bonds Payable Other Income (Interest) Investment in Bussman Bonds Gain on Retirement of Bonds Other Expenses (Interest) C C C C C C 9 9 9 9 9 9 3,375,000 30,375 483,300 A/P A/R C C 10 10 9,000 Investment in Bussman NCI Cost of goods sold D D D 11 11 11 22,198 2,466 Sales Cost of goods sold Inventory D D D 12 12 12 112,050 Accounts Payable Accounts Receivable D D 13 13 57,105 Invest in Bussman Stock NCI Income from Subsidiary Income to NCI E E E E 14 14 14 14 10,904 1,212 Equipment Investment in Bussman Stock NCI Accumulated Depreciation E E E E 15 15 15 15 197,100 Investment in Bussman Stock NCI Accumulated Depreciation E E E 16 16 16 10,904 1,212 Depreciation Expense Accumulated Depreciation E E 17 17 12,116 A/R 81,648 9,072 548,451 60,939 443,475 532,128 49,275 59,125 540,000 43,200 10,800 3,299,063 141,750 447,862 9,000 24,665 64,989 47,061 57,105 10,904 1,212 87,237 9,693 100,170 12,116 12,116 Topp Manufacturing Co. Three Part Worksheet 4/18/2015 Account Titles Sales Other Income Income from Bussman Topp 8,581,140 319,144 Bussman 2,799,225 247,658 958,574 Cost of Goods Sold (4,963,316) (1,147,682) Depreciation and Amortization Other Expenses (360,450) (1,138,928) (400,275) (414,923) Goodwill Impairment Loss Gain on Bond Retirement Income to NCI Net Income 3,396,164 1,084,003 Retained Earnings - Beginning Net Income - Above Dividends Declared Dividends Declared - NCI Retained Earnings - Ending 4,085,100 3,396,164 (168,750) 1,022,000 1,084,003 (443,475) (49,275) 1,613,253 Cash A/R Inventory Land B&E Investment in Bussman Stock Investment in Bussman Bonds Investment in Topp Bonds Goodwill Total 7,312,514 57,510 197,505 386,573 332,822 360,450 2,515,725 4,407,750 3,858,284 535,275 4,077,027 2,722,073 3,299,063 540,000 14,696,287 1,303,223 A/P 140,940 339,529 Bonds Payable 540,000 3,375,000 2,276,370 2,207,291 7,312,514 30,375 1,451,250 481,140 1,613,253 3 Accumulated Depreciation Premium on Bonds Payable Common Stock Premium on Common Stock Retained Earnings - End NCI TOTAL 2,847,389 8 10 13 12 2 15 2 3 4 11 14 15 16 9 6 2 15 16 17 8 10 13 6 9 9 3 3 2 3 5 11 14 15 16 14,696,286 8,593,770 1,022,000 1,825,389 4 5 8,593,770 2,219,171 Elimination Entries JE Dr CR 12 112,050 7 43,200 9 483,300 1 81,648 4 975,603 14 10,904 11 24,665 12 64,989 17 12,116 7 43,200 9 447,862 1 90,720 9 141,750 1 9,072 5 108,400 14 1,212 1,825,389 825,302 825,302 443,475 49,275 1,318,052 10,800 9,000 57,105 47,061 319,140 197,100 548,451 2,658,951 532,128 Consolidated 11,268,315 40,302 75,523 (6,021,344) (772,841) (1,062,789) (90,720) 141,750 (98,116) 3,480,080 4,085,100 3,480,080 (168,750) 0 7,396,430 444,083 453,422 848,664 6,911,892 7,326,923 75,523 22,198 10,904 87,237 10,904 3,299,063 540,000 290,250 850,496 7,789,796 100,170 12,116 12,116 10,800 9,000 57,105 540,000 3,375,000 30,375 1,451,250 481,140 2,847,389 0 0 290,250 16,350,757 3,646,796 403,564 0 1,318,052 60,939 295,439 59,125 0 2,276,370 2,207,291 7,396,430 420,306 2,466 1,212 9,693 1,212 8,806,949 1,867,650 16,350,757 16,350,757 Topp Manufacturing Co. Differential schedule 31-Dec-13 Initial acquisition Changes Ending Balance Changes Ending Balance Eliminating Entries Goodwill Impairment Loss Income from Bussman Income to NCI Land Goodwill Investment in Bussman NCI 2012 2012 2013 2013 Topp Co. 90% 630,099 630,099 (81,648) 548,451 90,720 81,648 9,072 319,140 290,250 548,451 60,939 + NCI 10% 70,011 70,011 (9,072) 60,939 = Land 319,140 319,140 319,140 + Goodwill 380,970 380,970 (90,720) 290,250 Topp Manufacturing Co. Book Value Schedule/Reconciliation December 31, 2013 NCI Investment in Bussman Stock Initial Acquisition 2012 Net Income/Dividends Deferred Gross Profit Loss on Equipment Excess Depreciation Balance 3,244,050 45,000 2012 2012 2012 22,198 2,466 10,905 1,212 87,237 12/31/2012 Net Income Dividends Deferred Gross Profit Excess Depreciation Goodwill Impairment Interest Income/Expense Gain on Bonds Realized Gross Profit 360,450 5,000 9,693 3,343,184 2013 2013 2013 2013 2013 2013 2013 2013 371,465 975,603 108,400 443,475 42,355 10,905 81,648 31,894 49,275 4,706 1,212 9,072 3,544 127,575 22,198 3,858,283 14,175 2,466 428,697 Book Value Allocation Schedule Initial Acquisition Net Income Dividends Balance Net Income Dividends Balance 12/31/2012 90% 10% Topp NCI 2012 2,613,951 290,439 2012 45,000 5,000 2012 2,658,951 295,439 12/31/2013 2013 2013 2013 975,603 443,475 3,191,079 108,400 49,275 354,564 CS 1,451,250 1,451,250 1,451,250 PIC RE 481,140 972,000 50,000 481,140 1,022,000 481,140 1,084,003 492,750 1,613,253 Topp Manufacturing Co. Intercompany Indebtedness December 31, 2013 Elimination entries and calculations regarding Topp's Sale of 540,000 par 8% bonds to Bussman on April 1, 2012 Elimination entry to eliminate bond Bonds Payable Investment in Topp Bonds Elimination of intercompany interest Par value of bond Bond interest Interest to eliminate Interest Income Interest Expense 540,000 540,000 540,000 0.08 43,200 43,200 43,200 Elimination of accrued interest at year end Par value of bond Bond interest Time since last payment (Years) Accrued interest to eliminate 12/31/2013 A/P 540,000 8% 1/4 10,800 10,800 A/R Dividends Not Paid But Declared A/P A/R 10,800 9000 9000 Gain on constructive retirement of Bussman's Bonds: Original proceeds from issuance of Bussman bonds Premium amortized to January 2, 20x3 (101,250 / 10) x 6 Book value of bonds at constructive retirement Price paid for Bussman bonds by Topp (3,375,000 x .97) Gain on constructive retirement of Bussman's bonds Interest income = (3375000 x .14) + 10800 = 483300 3,476,250 60,750 3,415,500 (3,273,750) 141,750 Topp Manufacturing Co. Intercompany Inventory Sales December 31, 2013 Intercompany Sales as of December 31, 2012 Resold to Inventory on Total = Nonaffiliate Hand 279,045 220,320 58,725 161,846 127,786 34,061 117,199 92,534 24,665 Intercompany Sales Less: Cost of goods sold Gross Profit Gross Profit % 42% Gross Profit Deferred 2012 24,665 Intercompany Sales as of December 31, 2013 Resold to Inventory on Total = Nonaffiliate Hand 493,290 381,240 112,050 286,108 221,119 64,989 207,182 160,121 47,061 Intercompany Sales Less: Cost of goods sold Gross Profit Gross Profit % 42% Gross Profit Deferred 2013 2013 EJE's Investment in Bussman NCI Cost of goods sold 47,061 Sales 22,198 2,466 24,665 *Reversal of 2012 Gross Profit Defferral 112,050 Cost of goods sold Inventory Accounts Payable Accounts Receivable Income from Bussman Income to NCI Investment in Bussman Stock NCI 64,989 47,061 *Elimination of intercompany inventory (still on hand) 57,105 57,105 *Elimination of Topp's share of intercompany payables (90%) 42,355 4,706 42,355 4,706 Bussman Co. Equipment Transaction 4/18/2015 Bussman Purchases Equipment Equipment Cash Gain/Loss on Equipment Sales Price Less: Net Book Value - Equip. Cost Less: Accumulated Depreciation Net Book Value 20X0 500,850 500,850 Excess Depreciation Parent's Book Value 303,750 / (10 - 2) Loss on Sale 96,930 / (10 - 2) Sub's Book Value (500,850 - 100,170) 500,850 / 10 Income - Sub Investment - Sub (12,116 X 90%) During 20X3 Income - Sub Investment Sub (12,116 X 90%) EJE 2 Equipment Investment in Bussman Stock NCI Accumulated Depreciation 50,085 Accumulated Depreciation X0 X1 Total 500,850 (100,170) 50,085 50,085 100,170 (400,680) 96,930 Parent Purchases Equipment Equipment Cash 500,850 20X2 303,750 Parent Depreciates Asset Depreciation Expense Accumulated Depreciation 303,750 / (10 - 2) = 37,969 per year 20X2 303,750 100,170 96,930 20X2 37,969 303,750 37,969 EJE's for 20X2 Depreciation 37,969 303,750 (96,930) (12,116) 400,680 50,085 10,904 EJE 1 Income - Sub Income to NCI Investment - Sub NCI 87,237 9,693 EJE 2 Investment - Sub NCI Income - Sub Income to NCI 10,904 1,212 87,237 9,693 10,904 1,212 10,904 EJE 3 Equipment Loss on Sale of Equipment Accumulated Depreciation 197,100 EJE 4 Depreciation Expense Accumulated Depreciation 10,904 12,116 96,930 100,170 10,904 EJE's for 20X3 EJE 1 Invest in Bussman Stock NCI Income from Subsidiary Income to NCI 50,085 303,750 Loss on Sale Bussman Sells Equip. to Topp Cash Accumulated Depreciation Loss on Sale Equipment Bussman Depreciates Equipment 12/31/X0, X1 Depreciation Expense Accumulated Depreciation 500,850 / 10 = 50,085 per year 10,904 1,212 10,904 1,212 197,100 87,237 9,693 100,170 EJE 3 Investment in Bussman Stock NCI Accumulated Depreciation 10,904 1,212 EJE 4 Depreciation Expense Accumulated Depreciation 12,116 12,116 12,116 12,116 Topp Manufacturing Co. Goodwill Impairment December 31, 2012 Goodwill at acquisition FV of Topp's Consideration + FV NCI Book Value of Bussman's Net Assets Common Stock- Bussman Retained Earnings- Bussman PIC- Bussman Difference Between FV and BV Less: Excess FV assigned to Land Goodwill 3,604,500 1,451,250 972,000 481,140 12/31/2011 2,904,390 700,110 319,140 380,970 Goodwill impairment test 12/31/2013 FV of Bussman's net assets Less: FV of Bussman's net assets without goodwill Implied goodwill Goodwill on Balance sheet Less: Implied Goodwill Goodwill Impairment loss 2,517,750 2,227,500 290,250 380,970 290,250 90,720