On January 1, 2015 , Purple Rain Company acquired Sunshine Company Purple Rain Company paid $60 per share for 80 of Sunshines common stock The price paid by Purple reflected a control premium The NCI shares were estimated to have a market value of $55 per share On the date of acquisition, Sunshine had the following balance sheet Sunshine Company Balance Sheet 1 Jan 15 Assets Liabilities Accounts receivable $60K Accounts Payable $40K Inventory $40K Bonds Payable $100K Land $60K Common Stock($1Par) $10K Build $200K Paid in excess of par $90K Accumulated Depreciation $50K Retained Earnings $112K Equipment $72K Accumulated depreciation $30K Buildings, which have a 20 year life, were understated by $120,000 Equipment, which has a 5 year life was understated by $40,000 Any remaining excess was considered goodwill Purple used the simple equity method to account for its investment in Sunshine January 1, 2016 , Purple held merchandise sold to it from Sunshine for $12,000 This beginning inventory had an applicable gross profit of 20 During 2016 , Sunshine sold merchandise to Purple for $90,000 On December 31, 2016 , Purple held $18,000 of this merchandise in its inventory (applicable gross profit rate of 25 ) Purple owed Sunshine $20,000 on December 31, 2016 as a result of this intercompany sale On January 1, 2016 , Purple sold equipment with a book value of $35,000 to Sunshine for $45,000 Purple also sold assets to nonaffiliates During 2016, the equipment was used by Sunshine Depreciation is computed over a 5 year life, using the straight line method Purple and Sunshine had the following trial balances on December 31, 2016 ( end of second year Purple rain Sunshine Cash 24000 132000 Accounts receivable 90000 45000 Inventory 120000 56000 Land 100000 60000 Investment in Sunshine 512000 Buildings 800000 200000 Accumulated depreciation bldgs 220000 65000 Equipment 150000 72000 Accumulated depreciation Equip 90000 46000 Goodwill Accounts payable 60000 102000 Bond payable 100000 Common Stock Sunshine 10000 Paid in capital in excess of par Sunshine 90000 Retained earnings Sunshine 142000 Common stocks Purple 100000 Paid in capital in excess of par purple 800000 Retained earnings Purple 365000 Sales 800000 350000 Cost of goods sold 450000 208500 Depr expense building 30000 7500 Depr expense equipment 15000 8000 Other expenses 160000 98000 Interest expense 8000 Gain on fixed asset sale 20000 Subsidiary income 16000 Dividends declared Sunshine 10000 Dividends declared Purple 20000 Totals 0 0 Prepare the consolidated worksheet as of December 31, 2016 , including the income distribution schedule

Question

On January 1, 2015 , Purple Rain Company acquired Sunshine Company  Purple Rain Company paid $60 per share for 80  of Sunshines common stock  The price paid by Purple reflected a control premium  The NCI shares were estimated to have a market value of $55 per share  On the date of acquisition, Sunshine had the following balance sheet  Sunshine Company Balance Sheet 1 Jan 15 Assets Liabilities Accounts receivable $60K Accounts Payable $40K Inventory $40K Bonds Payable $100K Land $60K Common Stock($1Par) $10K Build $200K Paid in excess of par $90K Accumulated Depreciation  $50K Retained Earnings $112K Equipment $72K Accumulated depreciation  $30K Buildings, which have a 20 year life, were understated by $120,000  Equipment, which has a 5 year life was understated by $40,000  Any remaining excess was considered goodwill  Purple used the simple equity method to account for its investment in Sunshine  January 1, 2016 , Purple held merchandise sold to it from Sunshine for $12,000  This beginning inventory had an applicable gross profit of 20   During 2016 , Sunshine sold merchandise to Purple for $90,000  On December 31, 2016 , Purple held $18,000 of this merchandise in its inventory (applicable gross profit rate of 25 )  Purple owed Sunshine $20,000 on December 31, 2016 as a result of this intercompany sale  On January 1, 2016 , Purple sold equipment with a book value of $35,000 to Sunshine for $45,000  Purple also sold assets to nonaffiliates  During 2016, the equipment was used by Sunshine  Depreciation is computed over a 5 year life, using the straight line method  Purple and Sunshine had the following trial balances on December 31, 2016 ( end of second year Purple rain Sunshine Cash 24000 132000 Accounts receivable 90000 45000 Inventory 120000 56000 Land 100000 60000 Investment in Sunshine 512000 Buildings 800000 200000 Accumulated depreciation  bldgs  220000  65000 Equipment 150000 72000 Accumulated depreciation  Equip  90000  46000 Goodwill Accounts payable  60000  102000 Bond payable  100000 Common Stock  Sunshine  10000 Paid in capital in excess of par  Sunshine  90000 Retained earnings  Sunshine  142000 Common stocks  Purple  100000 Paid in capital in excess of par  purple  800000 Retained earnings  Purple  365000 Sales  800000  350000 Cost of goods sold 450000 208500 Depr  expense  building 30000 7500 Depr  expense  equipment 15000 8000 Other expenses 160000 98000 Interest expense 8000 Gain on fixed asset sale  20000 Subsidiary income  16000 Dividends declared  Sunshine 10000 Dividends declared  Purple 20000 Totals 0 0 Prepare the consolidated worksheet as of December 31, 2016 , including the income distribution schedule

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On January 1, 2015 , Purple Rain Company acquired Sunshine Company. Purple Rain Company paid $60 per share for 80% of Sunshines common stock. The

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Sunshine Company
Balance Sheet
1-Jan-15
Assets	Liabilities
Accounts receivable	$60K	Accounts Payable	$40K
Inventory	$40K	Bonds Payable	$100K
Land	$60K	Common Stock($1Par)	$10K
Build	$200K	Paid in excess of par	$90K
Accumulated Depreciation	-$50K	Retained Earnings	$112K
Equipment	$72K
Accumulated depreciation	-$30K

	Purple rain	Sunshine
Cash	24000	132000
Accounts receivable	90000	45000
Inventory	120000	56000
Land	100000	60000
Investment in Sunshine	512000
Buildings	800000	200000
Accumulated depreciation- bldgs	-220000	-65000
Equipment	150000	72000
Accumulated depreciation- Equip	-90000	-46000
Goodwill
Accounts payable	-60000	-102000
Bond payable		-100000
Common Stock- Sunshine		-10000
Paid-in capital in excess of par- Sunshine		-90000
Retained earnings- Sunshine		-142000
Common stocks- Purple	-100000
Paid-in capital in excess of par- purple	-800000
Retained earnings- Purple	-365000
Sales	-800000	-350000
Cost of goods sold	450000	208500
Depr. expense- building	30000	7500
Depr. expense- equipment	15000	8000
Other expenses	160000	98000
Interest expense		8000
Gain on fixed asset sale	-20000
Subsidiary income	-16000
Dividends declared- Sunshine		10000
Dividends declared- Purple	20000
Totals	0	0