1. On January 1, 20X1, Prange Company acquired 100% of the common stock of Seaman Company for $600,000. On this date Seaman had total owners' equity of $400,000. Any excess of cost over book value is attributable to a patent, which is to be amortized over 10 years.

During 20X1 and 20X2, Prange has appropriately accounted for its investment in Seaman using the simple equity method.

On January 1, 20X2, Prange held merchandise acquired from Seaman for $30,000. During 20X2, Seaman sold merchandise to Prange for $100,000, of which $20,000 is held by Prange on December 31, 20X2. Seaman's gross profit on all sales is 40%.

On December 31, 20X2, Prange still owes Seaman $20,000 for merchandise acquired in December.

Required:

Complete the worksheet similar to Figure 4-1 (following) for consolidated financial statements for the year ended December 31, 20X2. Prepare your worksheet in Excel. Following is a template in Figure 4-1 that will guide you in setting up your worksheet in Excel.

Trial Balance Eliminations and Income Retained Balance Account Titles Inventory, December 31 Seaman Adjustments Statement NCI Eamings Sheet Account Titles Inventory, December 31 Other Current Assets Investment in Sub. Company Company 100,000 ompany 105,000 Debit Credit Other Current Assets 207,000 325,000 Investment in Sub, Company 710,000 Land Land 140,000 315,000 80,000 340,000 (130,000) Buildings and Equipment Accumulated Depreciation Buildings and Equipment Accumulated Depreciation 220,000 20,000 Patent Patent Current Liabilities Curent Liabilities (150,000) (70,000) (100,000) (40,000) Bonds Payable Bonds Payable Other Long-Tem Liabilities Other Long-Tem Liabilities (200,000) Common Stock-P Co (200,000) (100,000) (492,000) Common Stock-D Co. Other Paid in Capital-P Co. Retained Eamings-P Co. Other Paid in Capital-P Co. Retained Eamingi-P Co. Common Stock-S Co. (150,000) (100,000) (200,000) Common Stock-S Co. Other Paid in Capital-S Co. Retained Eamings-S Co. Other Paid in Capital-S Co Retained Eamings-S Co. Net Sales Net Sales (600,000) (380,000) 228,000 Cost of Gooda Sold Cost of Gooda Sold 360,000 Operating Expenses Operating Expenses 140,000 62,000 Subsidiary Income Dividends Declared-P Co. Subsidiary Income (90,000) 60,000 Dividends Declared-P Co. Dividends Declared-S Co. Dividends Declared-S Co. 30,000 Consolidated Net Income Consolidated Net Income NCI Controlling Interest Total NCI NCI Controlling Interest Total NCI Ret. Eam Contr. Int. 12-31 Ret. Eam Contr. Int. 12-31 0 (continued) Trial Balance Eliminations and Income Retained Balance Account Titles Inventory, December 31 Seaman Adjustments Statement NCI Eamings Sheet Account Titles Inventory, December 31 Other Current Assets Investment in Sub. Company Company 100,000 ompany 105,000 Debit Credit Other Current Assets 207,000 325,000 Investment in Sub, Company 710,000 Land Land 140,000 315,000 80,000 340,000 (130,000) Buildings and Equipment Accumulated Depreciation Buildings and Equipment Accumulated Depreciation 220,000 20,000 Patent Patent Current Liabilities Curent Liabilities (150,000) (70,000) (100,000) (40,000) Bonds Payable Bonds Payable Other Long-Tem Liabilities Other Long-Tem Liabilities (200,000) Common Stock-P Co (200,000) (100,000) (492,000) Common Stock-D Co. Other Paid in Capital-P Co. Retained Eamings-P Co. Other Paid in Capital-P Co. Retained Eamingi-P Co. Common Stock-S Co. (150,000) (100,000) (200,000) Common Stock-S Co. Other Paid in Capital-S Co. Retained Eamings-S Co. Other Paid in Capital-S Co Retained Eamings-S Co. Net Sales Net Sales (600,000) (380,000) 228,000 Cost of Gooda Sold Cost of Gooda Sold 360,000 Operating Expenses Operating Expenses 140,000 62,000 Subsidiary Income Dividends Declared-P Co. Subsidiary Income (90,000) 60,000 Dividends Declared-P Co. Dividends Declared-S Co. Dividends Declared-S Co. 30,000 Consolidated Net Income Consolidated Net Income NCI Controlling Interest Total NCI NCI Controlling Interest Total NCI Ret. Eam Contr. Int. 12-31 Ret. Eam Contr. Int. 12-31 0 (continued) Trial Balance Eliminations and Income Retained Balance Account Titles Inventory, December 31 Seaman Adjustments Statement NCI Eamings Sheet Account Titles Inventory, December 31 Other Current Assets Investment in Sub. Company Company 100,000 ompany 105,000 Debit Credit Other Current Assets 207,000 325,000 Investment in Sub, Company 710,000 Land Land 140,000 315,000 80,000 340,000 (130,000) Buildings and Equipment Accumulated Depreciation Buildings and Equipment Accumulated Depreciation 220,000 20,000 Patent Patent Current Liabilities Curent Liabilities (150,000) (70,000) (100,000) (40,000) Bonds Payable Bonds Payable Other Long-Tem Liabilities Other Long-Tem Liabilities (200,000) Common Stock-P Co (200,000) (100,000) (492,000) Common Stock-D Co. Other Paid in Capital-P Co. Retained Eamings-P Co. Other Paid in Capital-P Co. Retained Eamingi-P Co. Common Stock-S Co. (150,000) (100,000) (200,000) Common Stock-S Co. Other Paid in Capital-S Co. Retained Eamings-S Co. Other Paid in Capital-S Co Retained Eamings-S Co. Net Sales Net Sales (600,000) (380,000) 228,000 Cost of Gooda Sold Cost of Gooda Sold 360,000 Operating Expenses Operating Expenses 140,000 62,000 Subsidiary Income Dividends Declared-P Co. Subsidiary Income (90,000) 60,000 Dividends Declared-P Co. Dividends Declared-S Co. Dividends Declared-S Co. 30,000 Consolidated Net Income Consolidated Net Income NCI Controlling Interest Total NCI NCI Controlling Interest Total NCI Ret. Eam Contr. Int. 12-31 Ret. Eam Contr. Int. 12-31 0 (continued) Trial Balance Eliminations and Income Retained Balance Account Titles Inventory, December 31 Seaman Adjustments Statement NCI Eamings Sheet Account Titles Inventory, December 31 Other Current Assets Investment in Sub. Company Company 100,000 ompany 105,000 Debit Credit Other Current Assets 207,000 325,000 Investment in Sub, Company 710,000 Land Land 140,000 315,000 80,000 340,000 (130,000) Buildings and Equipment Accumulated Depreciation Buildings and Equipment Accumulated Depreciation 220,000 20,000 Patent Patent Current Liabilities Curent Liabilities (150,000) (70,000) (100,000) (40,000) Bonds Payable Bonds Payable Other Long-Tem Liabilities Other Long-Tem Liabilities (200,000) Common Stock-P Co (200,000) (100,000) (492,000) Common Stock-D Co. Other Paid in Capital-P Co. Retained Eamings-P Co. Other Paid in Capital-P Co. Retained Eamingi-P Co. Common Stock-S Co. (150,000) (100,000) (200,000) Common Stock-S Co. Other Paid in Capital-S Co. Retained Eamings-S Co. Other Paid in Capital-S Co Retained Eamings-S Co. Net Sales Net Sales (600,000) (380,000) 228,000 Cost of Gooda Sold Cost of Gooda Sold 360,000 Operating Expenses Operating Expenses 140,000 62,000 Subsidiary Income Dividends Declared-P Co. Subsidiary Income (90,000) 60,000 Dividends Declared-P Co. Dividends Declared-S Co. Dividends Declared-S Co. 30,000 Consolidated Net Income Consolidated Net Income NCI Controlling Interest Total NCI NCI Controlling Interest Total NCI Ret. Eam Contr. Int. 12-31 Ret. Eam Contr. Int. 12-31 0 (continued)