On January 1, 2017, Pineapple Company acquired 8,500 of Samsung Company common stock for $200,000. Samsung had the following Balance Sheet on the date of acquisition: Assets ($) Accounts Receivable Inventory Land Buildings Accumulated Depreciation Equipment & Machinery Accumulated Depreciation Total Assets Samsung Company Balance Sheet January 1, 2017 Liabilities ($) 40,000 Accounts Payable 20,000 Bonds Payable 35,000 Discount on Bonds Payable 250,000 Common Stock ($1 par) (50,000) Paid-in Capital in Excess of Par 120,000 Retained Earnings (60,000) 355,000 Total Liabilities 42,297 100,000 (2,297) 10,000 90,000 115,000 355,000 Equipment (10-year life) is undervalued by $60,000 and Accounts Payable was valued at $40,000. Samsung sold a piece of machinery to Pineapple for $30,000 on January 1, 2017. It cost Samsung $20,000 to build the machinery, which has a 5-year remaining life on the date of the sale and is subject to straight-line depreciation. On January 1, 2019, Samsung held merchandise acquired from Pineapple for $20,000. During 2019, Pineapple sold $60,000 worth of merchandise to Samsung Samsung held $25,000 of this merchandise at December 31, 2019. Samsung owed Pineapple $12,000 on December 31, 2019 as a result of these intercompany sales. Pineapple has a gross profit rate of 30%. On January 1, 2019, Pineapple held merchandise acquired from Samsung for $10,000. During 2019, Samsung sold $40,000 worth of merchandise to Pineapple. Pineapple held $6,000 of this merchandise at December 31, 2019. Pineapple owed Samsung $11,000 on December 31, 2019 as a result of these intercompany sales. Samsung has a gross profit rate of 25%. Samsung issued $100,000 of 8%, 10 year bonds for $96,719 on January 1, 2014. Annual interest is paid on December 31. Pineapple purchased the bonds on January 1, 2018, for $100,930. Both companies use the straight-line method to amortize the premium/discount on the bonds. Pineapple and Samsung had the following trial balances on December 31, 2019: Samsung 61,031 60,000 45,000 45,000 Pineapple 103,444 110,000 120,000 150,000 254,808 100,620 500,000 (330,000) 200,000 (115,000 (35,000) Balances Cash Accounts Receivable Inventory Land Investment in Subsidiary Investment in Subsidiary Bonds Buildings Accumulated Depreciation Equipment & Machinery Accumulated Depreciation Accounts Payable Bonds Payable Discount on Bonds Payable Common Stock Paid-In Capital in Excess of Par Retained Earnings, January 1 Sales Cost of Goods Sold Depreciation Expense - Buildings Depreciation Expense - Equipment & Machinery Other Expenses Interest Revenue Interest Expense Subsidiary Income Dividends Declared Total (100,000) (600,000) (295,690) (700,000) 480,000 30,000 15,000 125,000 (7,845) 250,000 (80,000) 120,000 (96,000) (25,000) (100,000) 1,313 (10,000) (90,000) (159,672) (230,000) 125,000 10,000 12,000 43,000 8,328 (25,337) 20,000 0 10,000 Required: Prepare the Eliminating and Adjusting Entries, the Schedules and Worksheet necessary to produce the consolidated financial statements of Pineapple Company and its subsidiary for the year ended December 31, 2019. (25 marks) On January 1, 2017, Pineapple Company acquired 8,500 of Samsung Company common stock for $200,000. Samsung had the following Balance Sheet on the date of acquisition: Assets ($) Accounts Receivable Inventory Land Buildings Accumulated Depreciation Equipment & Machinery Accumulated Depreciation Total Assets Samsung Company Balance Sheet January 1, 2017 Liabilities ($) 40,000 Accounts Payable 20,000 Bonds Payable 35,000 Discount on Bonds Payable 250,000 Common Stock ($1 par) (50,000) Paid-in Capital in Excess of Par 120,000 Retained Earnings (60,000) 355,000 Total Liabilities 42,297 100,000 (2,297) 10,000 90,000 115,000 355,000 Equipment (10-year life) is undervalued by $60,000 and Accounts Payable was valued at $40,000. Samsung sold a piece of machinery to Pineapple for $30,000 on January 1, 2017. It cost Samsung $20,000 to build the machinery, which has a 5-year remaining life on the date of the sale and is subject to straight-line depreciation. On January 1, 2019, Samsung held merchandise acquired from Pineapple for $20,000. During 2019, Pineapple sold $60,000 worth of merchandise to Samsung Samsung held $25,000 of this merchandise at December 31, 2019. Samsung owed Pineapple $12,000 on December 31, 2019 as a result of these intercompany sales. Pineapple has a gross profit rate of 30%. On January 1, 2019, Pineapple held merchandise acquired from Samsung for $10,000. During 2019, Samsung sold $40,000 worth of merchandise to Pineapple. Pineapple held $6,000 of this merchandise at December 31, 2019. Pineapple owed Samsung $11,000 on December 31, 2019 as a result of these intercompany sales. Samsung has a gross profit rate of 25%. Samsung issued $100,000 of 8%, 10 year bonds for $96,719 on January 1, 2014. Annual interest is paid on December 31. Pineapple purchased the bonds on January 1, 2018, for $100,930. Both companies use the straight-line method to amortize the premium/discount on the bonds. Pineapple and Samsung had the following trial balances on December 31, 2019: Samsung 61,031 60,000 45,000 45,000 Pineapple 103,444 110,000 120,000 150,000 254,808 100,620 500,000 (330,000) 200,000 (115,000 (35,000) Balances Cash Accounts Receivable Inventory Land Investment in Subsidiary Investment in Subsidiary Bonds Buildings Accumulated Depreciation Equipment & Machinery Accumulated Depreciation Accounts Payable Bonds Payable Discount on Bonds Payable Common Stock Paid-In Capital in Excess of Par Retained Earnings, January 1 Sales Cost of Goods Sold Depreciation Expense - Buildings Depreciation Expense - Equipment & Machinery Other Expenses Interest Revenue Interest Expense Subsidiary Income Dividends Declared Total (100,000) (600,000) (295,690) (700,000) 480,000 30,000 15,000 125,000 (7,845) 250,000 (80,000) 120,000 (96,000) (25,000) (100,000) 1,313 (10,000) (90,000) (159,672) (230,000) 125,000 10,000 12,000 43,000 8,328 (25,337) 20,000 0 10,000 Required: Prepare the Eliminating and Adjusting Entries, the Schedules and Worksheet necessary to produce the consolidated financial statements of Pineapple Company and its subsidiary for the year ended December 31, 2019. (25 marks)