Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2016. Miller paid $800,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $200,000 both before and after Millers acquisition.

On January 1, 2016, Taylor reported a book value of $738,000 (Common Stock = $369,000; Additional Paid-In Capital = $110,700; Retained Earnings = $258,300). Several of Taylors buildings that had a remaining life of 20 years were undervalued by a total of $98,300.

During the next three years, Taylor reports income and declares dividends as follows:

Year	Net Income			Dividends
2016	$	86,200		$	12,400
2017		111,600			18,700
2018		124,600			25,000

Determine the appropriate answers for each of the following questions:

1. What amount of excess depreciation expense should be recognized in the consolidated financial statements for the initial years following this acquisition?

2. If a consolidated balance sheet is prepared as of January 1, 2016, what amount of goodwill should be recognized?

3. If a consolidation worksheet is prepared as of January 1, 2016, what Entry S and Entry A should be included?

4. On the separate financial records of the parent company, what amount of investment income would be reported for 2016 under each of the following accounting methods?

• The equity method.
• The partial equity method.
• The initial value method.

5. On the parent companys separate financial records, what would be the December 31, 2018, balance for the Investment in Taylor Company account under each of the following accounting methods?

• The equity method.
• The partial equity method.
• The initial value method.

6. As of December 31, 2017, Millers Buildings account on its separate records has a balance of $1,000,000 and Taylor has a similar account with a $375,000 balance. What is the consolidated balance for the Buildings account?

7. What is the balance of consolidated goodwill as of December 31, 2018?

8. Assume that the parent company has been applying the equity method to this investment. On December 31, 2018, the separate financial statements for the two companies present the following information:

	Miller Company				Taylor Company
Common stock	$	625,000			$	369,000
Additional paid-in capital		350,000				110,700
Retained earnings, 12/31/18		775,000				524,600

What will be the consolidated balance of each of these accounts?

Complete this question by entering your answers in the tabs below. Req A and B Reqc Req D and E Req F and G ReqH What amount of excess depreciation expense should be recognized in the consolidated fir years following this acquisition? 5. If a consolidated balance sheet is prepared as of January 1, 2016, what amount of good $ a. Amount of excess depreciation . Amount of goodwill 4,490 236,200 $ Req A and B Reqc Reg D and E Req F and G ReqH If a consolidation worksheet is prepared as of January 1, 2016, what Entry S and Entry A shou view transaction list Consolidation Worksheet Entries 1 2 > Prepare entry S. Complete this question by entering your answers in the tabs below. Req A and B Reqc Req D and E Req F and G ReqH d. On the separate financial records of the parent company, what amount of investment incom under each of the following accounting methods? e. On the parent company's separate financial records, what would be the December 31, 2018, Taylor Company account under each of the following accounting methods? d. Investment e. Investment Income Balance The equity method The partial equity method The initial value method Complete this question by entering your answers in the tabs below. Req A and B Reg C Req D and E Req F and G ReqH Assume that the parent company has been applying the equity method to this investment. On December 31, 2018, the separate financial statements for the two companies present the following information: $ Common stock Additional paid-in capital Retained earnings, 12/31/18 Miller Company 625,000 350,000 775,000 Taylor Company 369,000 110,700 524,600 What will be the consolidated balance of each of these accounts? Show less Common stock Additional paid-in capital Retained earnings, 12/31/18