On January 1, 2014, Picante Corporation acquired 100 percent of the outstanding voting stock of Salsa Corporation for $1,933,000 cash. On the acquisition date, Salsa had the following balance sheet:

Cash	$	116,000		Accounts payable	$	176,000
Accounts receivable		171,000		Long-term debt		1,004,000
Land		704,000		Common stock		1,041,000
Equipment (net)		1,904,000		Retained earnings		674,000
	$	2,895,000			$	2,895,000

At the acquisition date, the following allocation was prepared:

Fair value of consideration transferred			$	1,933,000
Book value acquired				1,715,000
Excess fair value over book value				218,000
To in-process research and development	$	60,250
To equipment (8-year remaining life)		133,600		193,850
To goodwill (indefinite life)			$	24,150

Although at acquisition date Picante had expected $60,250 in future benefits from Salsas in-process research and development project, by the end of 2014, it was apparent that the research project was a failure with no future economic benefits.

On December 31, 2015, Picante and Salsa submitted the following trial balances for consolidation. There were no intra-entity payables on that date.

		Picante			Salsa
Sales	$	(3,724,950	)	$	(1,215,500	)
Cost of goods sold		1,765,000			747,500
Depreciation expense		543,250			168,000
Subsidiary income		(283,300	)		0
Net income	$	( 1,700,000	)	$	(300,000	)
Retained earnings 1/1/15	$	(3,002,500	)	$	(850,000	)
Net income		(1,700,000	)		(300,000	)
Dividends declared		200,000			26,025
Retained earnings 12/31/15	$	(4,502,500	)	$	(1,123,975	)
Cash	$	218,675		$	74,975
Accounts receivable		848,000			156,000
Inventory		968,000			671,000
Investment in Salsa		2,289,325			0
Land		3,412,500			741,000
Equipment (net)		5,032,500			1,780,000
Goodwill		303,000			0
Total assets	$	13,072,000		$	3,422,975
Accounts payable	$	(267,000	)	$	(456,000	)
Long-term debt		(3,152,500	)		(802,000	)
Common stock		(5,150,000	)		(1,041,000	)
Retained earnings 12/31/15		(4,502,500	)		(1,123,975	)
Total liabilities and equities	$	(13,072,000	)	$	(3,422,975	)

Note: Parentheses indicate a credit balance.

a.	Determine the investment in Salsa account balance as on December 31, 2015. (Amounts to be deducted should be indicated by a minus sign.)

a. Determine the investment in Salsa account balance as on December 31, 2015. (Amounts to be deducted should be indicated by a minus sign.) Consideration transferred 1/1/14 Investment balance 12/31/15 c. Prepare a consolidated worksheet for Picante and Salsa as of December 31, 2015. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) PICANTE AND SUBSIDIARY SALSA Consolidated Worksheet For The Year Ended December 31, 2015 Consolidation Entriet Accounts Debit Credit Sales Cost of goods sold Depreciation expense Subsidiary income Net Income Picante Salsa $ (3,724,950) $ (1,215,500) 1,765,000 747,500 543,250 168,000 (283,300) 0 $ (1,700,000) $ (300,000) Retained earnings 1/1/15 Net Income Dividends declared Retained earnings 12/31/15 $ (3,002,500) $ (850,000) (1.700,000) (300,000) 200,000 26,025 $ (4,502,500) $ (1,123,975) Cash Accounts receivable 218,675 $ 848 000 74,975 156,000 AZ Type here to search where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) Accounts PICANTE AND SUBSIDIARY SALSA Consolidated Worksheet For The Year Ended December 31, 2015 Consolidation Entries Picante Salsa Debit Credit $ (3,724,950) $ (1,215,500) 1,765,000 747,500 543,250 168,000 (283,300) $ (1,700,000) $ (300,000) Consolida Totals Sales Cost of goods sold Depreciation expense Subsidiary income Net Income Retained earnings 1/1/15 Net Income Dividends declared Retained earnings 12/31/15 $ (3,002,500) $ (850,000) (1,700,000) (300,000) 200,000 26,025 $ (4,502,500) $ (1,123,975) Cash Accounts receivable Inventory Investment in Salsa Land Equipment (net) Goodwill Total assets $ 218,675$ 848,000 968,000 2,289,325 3,412,500 5,032,500 303,000 $ 13,072,000 $ 74,975 156,000 671,000 0 741,000 1,780,000 0 3,422,975 16,700 Accounts payable Long-term debt Common stock-Picante Common stock-Salsa Retained earnings 12/31/15 Total liabilities and equity $ (267,000) $ (456,000) (3,152,500) (802,000) (5, 150,000) (1,041,000) (4,502,500) (1,123,975) $(13,072,000) $ (3,422,975) Type here to search O E. a. Determine the investment in Salsa account balance as on December 31, 2015. (Amounts to be deducted should be indicated by a minus sign.) Consideration transferred 1/1/14 Investment balance 12/31/15 c. Prepare a consolidated worksheet for Picante and Salsa as of December 31, 2015. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) PICANTE AND SUBSIDIARY SALSA Consolidated Worksheet For The Year Ended December 31, 2015 Consolidation Entriet Accounts Debit Credit Sales Cost of goods sold Depreciation expense Subsidiary income Net Income Picante Salsa $ (3,724,950) $ (1,215,500) 1,765,000 747,500 543,250 168,000 (283,300) 0 $ (1,700,000) $ (300,000) Retained earnings 1/1/15 Net Income Dividends declared Retained earnings 12/31/15 $ (3,002,500) $ (850,000) (1.700,000) (300,000) 200,000 26,025 $ (4,502,500) $ (1,123,975) Cash Accounts receivable 218,675 $ 848 000 74,975 156,000 AZ Type here to search where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) Accounts PICANTE AND SUBSIDIARY SALSA Consolidated Worksheet For The Year Ended December 31, 2015 Consolidation Entries Picante Salsa Debit Credit $ (3,724,950) $ (1,215,500) 1,765,000 747,500 543,250 168,000 (283,300) $ (1,700,000) $ (300,000) Consolida Totals Sales Cost of goods sold Depreciation expense Subsidiary income Net Income Retained earnings 1/1/15 Net Income Dividends declared Retained earnings 12/31/15 $ (3,002,500) $ (850,000) (1,700,000) (300,000) 200,000 26,025 $ (4,502,500) $ (1,123,975) Cash Accounts receivable Inventory Investment in Salsa Land Equipment (net) Goodwill Total assets $ 218,675$ 848,000 968,000 2,289,325 3,412,500 5,032,500 303,000 $ 13,072,000 $ 74,975 156,000 671,000 0 741,000 1,780,000 0 3,422,975 16,700 Accounts payable Long-term debt Common stock-Picante Common stock-Salsa Retained earnings 12/31/15 Total liabilities and equity $ (267,000) $ (456,000) (3,152,500) (802,000) (5, 150,000) (1,041,000) (4,502,500) (1,123,975) $(13,072,000) $ (3,422,975) Type here to search O E