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On December 31, 20X1. Priority Company purchased 80% of the common stock of Subsidiary Company for $1,550,000. On this date, Subsidiary had total owners' equity

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On December 31, 20X1. Priority Company purchased 80% of the common stock of Subsidiary Company for $1,550,000. On this date, Subsidiary had total owners' equity of $650,000 (common stock $100.000, other paid-in capital, $200,000, and retained earings, $350.000). Any excess of cost over book value is due to the under or overvaluation of certain assets and liabilities Assets and liabilities with differences in book and fair values are provided in the following table: Book Fair Value Value Current Assets $500,000 $800,000 Accounts Receivable 200,000 150.000 Inventory 800,000 800,000 Land 100,000 600,000 Buildings (net) 700,000 900,000 Current Liabilities 800,000 875,000 Long-Term Debt 850,000 930,000 Remaining excess, if any, is due to goodwill. Required: Using the information above and on the separate worksheet, prepare a schedule to determine and distribute the excess of cost over book value b. Complete the Figure 2-1 worksheet for a consolidated balance sheet as of December 31. 20X1 Figure 2-1 Trial Balance Priority Sub Company Company Eliminations and Adjustments Debit Credit Account Titles Assets: Current Assets Accounts Receivable Inventory Investment in Sub Co. 425,000 530,000 1,600,000 1.550,000 500.000 200.000 800.000 Land Buildings and Equipment Accumulated Depreciation 225,000 1,200,000 800,000 100,000 1.100.000 (400,000) Total 4.730,000 2,300,000 Liabilities and Equity Current Liabilities Bonds Payable 2,100,000 1,000,000 800,000 850,000 Common Stock-P Co. 900,000 Laddn. I paid-in cart - Co Retained Eamings - P Co. 670,000 60.000 Common Stock - S Co. Addin' paid-in cart-S Co Retained Earnings - S Co. 100,000 200,000 350.000 NCI Total 4.730,000 2,300,000 (continued) Consolidated Balance Sheet Debit Credit NCI Account Titles Assets: Current Assets Accounts Receivable Inventory Investment in Sub Co Land Buildings and Equipment Accumulated Depreciation Liabilities and Equity Current Liabilities Bonds Payable Common Stock-P Co. Addn't paid-in cart -P Co Retained Eamings - P Co. Common Stock - S Co. Addni paid-in cart-S Co Retained Earnings - Co. NCI Total On December 31, 20X1. Priority Company purchased 80% of the common stock of Subsidiary Company for $1,550,000. On this date, Subsidiary had total owners' equity of $650,000 (common stock $100.000, other paid-in capital, $200,000, and retained earings, $350.000). Any excess of cost over book value is due to the under or overvaluation of certain assets and liabilities Assets and liabilities with differences in book and fair values are provided in the following table: Book Fair Value Value Current Assets $500,000 $800,000 Accounts Receivable 200,000 150.000 Inventory 800,000 800,000 Land 100,000 600,000 Buildings (net) 700,000 900,000 Current Liabilities 800,000 875,000 Long-Term Debt 850,000 930,000 Remaining excess, if any, is due to goodwill. Required: Using the information above and on the separate worksheet, prepare a schedule to determine and distribute the excess of cost over book value b. Complete the Figure 2-1 worksheet for a consolidated balance sheet as of December 31. 20X1 Figure 2-1 Trial Balance Priority Sub Company Company Eliminations and Adjustments Debit Credit Account Titles Assets: Current Assets Accounts Receivable Inventory Investment in Sub Co. 425,000 530,000 1,600,000 1.550,000 500.000 200.000 800.000 Land Buildings and Equipment Accumulated Depreciation 225,000 1,200,000 800,000 100,000 1.100.000 (400,000) Total 4.730,000 2,300,000 Liabilities and Equity Current Liabilities Bonds Payable 2,100,000 1,000,000 800,000 850,000 Common Stock-P Co. 900,000 Laddn. I paid-in cart - Co Retained Eamings - P Co. 670,000 60.000 Common Stock - S Co. Addin' paid-in cart-S Co Retained Earnings - S Co. 100,000 200,000 350.000 NCI Total 4.730,000 2,300,000 (continued) Consolidated Balance Sheet Debit Credit NCI Account Titles Assets: Current Assets Accounts Receivable Inventory Investment in Sub Co Land Buildings and Equipment Accumulated Depreciation Liabilities and Equity Current Liabilities Bonds Payable Common Stock-P Co. Addn't paid-in cart -P Co Retained Eamings - P Co. Common Stock - S Co. Addni paid-in cart-S Co Retained Earnings - Co. NCI Total

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