I need help figuring out how the solution shows FMV of net assets excluding goodwill as $340,000. I am calculating $440,000 and cannot figure out what I'm doing wrong. Please help.
3. For 2015 and 2016, prepare the worksheet elimination that would be made on a consoli- dated worksheet under the simple equity, sophisticated equity, and cost methods. You may want to set up a worksheet with side-by-side columns for each method so that you can easily compare the entries. Problem 3-2 (LO 2) Simple equity method adjustments, consolidated work- sheet. On January 1, 2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000. Solar has common stock, other paid-in capital in excess of par, and retained earnings of $50,000, $100,000, and $150,000, respectively. Net income and dividends for two years for Solar are as follows: 2015 2016 Net income $60,000 $90,000 Dividends. 20,000 30,000 On January 1, 2015, the only undervalued tangible assets of Solar are inventory and the building. Inventory, for which FIFO is used, is worth $10,000 more than cost. The inventory is sold in 2015. The building, which is worth $30,000 more than book value, has a remaining life of 10 years, and straight-line depreciation is used. The remaining excess of cost over book value is attributed to goodwill. 1. Using this information and the information in the following trial balances on December 31, 2016, prepare a value analysis and a determination and distribution of excess schedule: Inventory, December 31 Other Current Assets Investment in Solar Company Paro Solar Company Company 100,000 50,000 136,000 180,000 400,000 50,000 50,000 350,000 320,000 (100,000) (60,000) Land....... Buildings and Equipment. Accumulated Depreciation Goodwill Other Intangibles. Current Liabilities. 20,000 (120,000) (40,000) (continued) Purt / COMBINED CORPORATE ENTITIES AND CONSOLIDATION erksheet. (This is the same as Problem 3-2, except that the sophisticated equity method is 4.) On January 1, 2015, Paro Company purchases 80% of the common stock of Solar Com Paro Company Solar Company (100,000 (200,000) (200,000) (100,000) (214,000) Bonds Payable. Other Long-Term Liabilities Common Stock --Paro Company Other Paid In Capital in Excess of Par-Paro Company Retained Earnings-Paro Company Common Stock-Solar Company. Other Paid-in Capital in Excess of Par-Solar Company. Retained Earnings-Solar Company.. Net Sales. Cost of Goods Sold Operating Expenses Subsidiary Income. Dividends DeclaredParo Company. (50,000) (100,000 (190,000) (520,000) (450,000 300,000 260,000 120,000 100,000 172,000) 50,000 30,000 Dividends DeclaredSolar Company Totals Complete a worksheet for consolidated financial statements for 2016. Include columns for eliminations and adjustments, consolidated income, NCI, controlling retained earnings, and consolidated balance sheet. Oblem 3-3 (LO 4) Sophisticated equity method adjustments, consolidated for $320,000. On this date, Solar has common stock, other paid-in capital in excess o and retained earnings of $50,000, $100,000, and $150,000, respectively ends for two years for Solar Company are as follows: of
