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On January 1, 2022, Petune Company acquired 80% of the common stock of Sand Com pany for $200,000. On this date, Sand had total owner's
On January 1, 2022, Petune Company acquired 80% of the common stock of Sand Com pany for $200,000. On this date, Sand had total owner's equity If $200,000. During the 2021 and 2022, Petune has appropriately accounted for its investment in Sand using the simple equity method. Any excess of cost over book value is attributable to inventory (worth $12,500 than cost), to equipment (worth $25,000 more than book value), and to goodwill. FIFI is used for inventories. The equipment has a remaining life of 4 years, and straight-line depreciation is used. On January 1, 2022, Petune held merchandise acquired from Sand for $20,000. During 2022, Sand sold merchandise to Petune for $40,000, $10,000 of which is still held by Petune on December 31, 2022, Sand usual gross profit is 50%. On December 31, 2021, Petune sold equipment to Sand at a gain of $15,000. During 2022, the equipment was used by Sam. Depreciation is being computed using the straight-line method, a 5-year life, and no salvage value The following trial balances were prepared for the Petune and Sand companies for December 31, 2022: Sand Company 50,000 235,000 Petune Company 130,000 241,000 308,000 20,000 14, 000 375,000 (120,000) Inventory, December 31 Other Current Assets Investment in Sand Company Other Long-Term Investments Land Building and Equipment Accumulated Depreciation Other Intangibles Current Liabilities Bonds payable Other Long-Term Liabilities Common Stock, Petune Company Other Paid-in Capital, Petune Company (100,000) Retained Earnings, Petune Company(320,000) Common Stock, Sand Company Other Paid-in Capital, Sand Company Retained Earnings, Petune Company Net Sales Cost of Goods Sold Operating Expenses Subsidiary Income 80,000 200,000 (30,000) 20,000) (70,000) (100,000) (50,000) (150,000) (200,000) (200,000) (50,000) (50,000) (150,000) (315,000) 150,000 60,000 (600,000) 350,000 150,000 (84,000) 60,000 Dividends Declared, Petune Company Dividends Declared, Sand Company 20,000 Complete the worksheet for consolidated financial statements for the ended December 31, 2022. Include the necessary determination and distribution of excess schedule and income distribution schedules
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