P6-6) (Worksheet, consolidated taxation, simpe equity, inventory, land
On January 1, 2015, Pepper company purchases 80% of the common stock of Salty company for $270,000. On this date, Salty has total OE of $300,000. The excess of cost over BV is due to goodwill. For tax purposes, goodwill is amortized over 15 years. During 2015, Pepper appropriately accounts for its investment in Salty using the simple equity method. During 2015, Pepper appropriately accounts for its investment in Salty using the simple equity method. Diring 2015, Pepper sells merchandise to Salty for $50,000, of which $10,000 is held by Salty on Dec. 31, 2015. Peppers gross profit on sales is 40%. During 2015, Salty sells some land to Pepper at a gain of 10,000. Pepper still holds the land at year end. Pepper and Salty qualify as an affiliated froup for tax purposes and, thus, will file a consolidated tax return. Assume a 30% corporate income tax rate.
The following trial balances are prepared on Dec. 31, 2015:
	Pepper Company	Salty Company
Inventory, Decemebr 31	$100,000	$50,000
Other Current Assets	$198,000	$200,000
Investment in Salty Company	$302,000
Land	$240,000	$100,000
Buildings and Equipment	$300,000	$200,000
Accumulated Depreciation	$(80,000)	$(60,000)
Current Liabilites	$(150,000)	$(50,000)
Long-Term Liabilities	$(200,000)	$(100,000)
Common Stock	$(100,000)	$(50,000)
PIC Excess of Par	$(180,000)	$(100,000)
RE	$(320,000)	$(150,000)
Sales	$(500,000)	$(300,000)
COGS	$300,000	$180,000
Operating Expenses	$100,000	$80,000
Subsidiary Income	$(40,000)
Gain on Sale of Land		$(10,000)
Dividends Declared	$30,000	$10,000
Total	$-	$-
Prepare a consolidated worksheet for Pepper Company and subsidiary Salty company for the year ended Dec. 31, 2015. Include the determination and distribution of excess schedule and the income distribution schedules.