Par Corporation acquired a 70 percent interest in Sul Corporation's outstanding voting common stock on January 1, 2011, for $490.000 cash. The stockholders' equity (book value) of Sul on this date con- sisted of $500.000 capital stock and $100,000 retained earnings. The differences between the fair value of Sul and the book value of Sul were assigned $5,000 to Sul's undervalued inventory. $14.000 to undervalued buildings. $21,000 to undervalued equipment, and $40,000 to previously unrecorded pat- ents. Any remaining excess is goodwill. The undervalued inventory items were sold during 2011. and the undervalued buildings and equipment had remaining useful lives of seven years and three years, respectively. The patents have a 40-year life. Depreciation is straight line. At December 31, 2011. Sul's accounts payable include $10,000 owed to Par. This $10,000 account payable is due on January 15, 2012. Separate financial statements for Par and Sul for 2011 are summarized as follows (in thousands): Sul $700 (300) Combined Income and Retained Earnings Statements for the Year Ended December 31 Sales Income from Sul Cost of sales Depreciation expense Other expenses Net incon Add: Retained earnings January 1 Deduct Dividends Relained caming December 31 245.5 (200) Balance Sheetar December 37 Didends receivable SESU $ 800 $700 (300) (400) Combined Income and Relatned Earnings Statements for the Year Ended December 31 Sales Income from Sul Cost of sales Depreciation expense Other expenses Net income Add: Retained earnings January 1 Deduct: Dividends Retained carning: December 31 (140) 300 (200) S 345.5 Balance Sheet ar llecember 3] S. 86 100 70 Dividends receivable Imentones Other current issels 10 # Buildings net Inement in Sul 11.6945 5830 Account parable 100 Capital sock. So mar 1.00 3453 $16915 Please perform the following steps as shown in class: --Find the Fair Value of Sul --Calculate the total excess --Prepare a schedule to allocate and amortize the total excess --Prepare the Timeline --Prepare the four T accounts (P's Investment in Sul. P's Income in Sul Noncontrolling Interest, and Noncontrolling Share) -Factual Elimination Entries --Consolidating Entries/Elimination Entries ( SAID. ID. E) Par Corporation acquired a 70 percent interest in Sul Corporation's outstanding voting common stock on January 1, 2011, for $490.000 cash. The stockholders' equity (book value) of Sul on this date con- sisted of $500.000 capital stock and $100,000 retained earnings. The differences between the fair value of Sul and the book value of Sul were assigned $5,000 to Sul's undervalued inventory. $14.000 to undervalued buildings. $21,000 to undervalued equipment, and $40,000 to previously unrecorded pat- ents. Any remaining excess is goodwill. The undervalued inventory items were sold during 2011. and the undervalued buildings and equipment had remaining useful lives of seven years and three years, respectively. The patents have a 40-year life. Depreciation is straight line. At December 31, 2011. Sul's accounts payable include $10,000 owed to Par. This $10,000 account payable is due on January 15, 2012. Separate financial statements for Par and Sul for 2011 are summarized as follows (in thousands): Sul $700 (300) Combined Income and Retained Earnings Statements for the Year Ended December 31 Sales Income from Sul Cost of sales Depreciation expense Other expenses Net incon Add: Retained earnings January 1 Deduct Dividends Relained caming December 31 245.5 (200) Balance Sheetar December 37 Didends receivable SESU $ 800 $700 (300) (400) Combined Income and Relatned Earnings Statements for the Year Ended December 31 Sales Income from Sul Cost of sales Depreciation expense Other expenses Net income Add: Retained earnings January 1 Deduct: Dividends Retained carning: December 31 (140) 300 (200) S 345.5 Balance Sheet ar llecember 3] S. 86 100 70 Dividends receivable Imentones Other current issels 10 # Buildings net Inement in Sul 11.6945 5830 Account parable 100 Capital sock. So mar 1.00 3453 $16915 Please perform the following steps as shown in class: --Find the Fair Value of Sul --Calculate the total excess --Prepare a schedule to allocate and amortize the total excess --Prepare the Timeline --Prepare the four T accounts (P's Investment in Sul. P's Income in Sul Noncontrolling Interest, and Noncontrolling Share) -Factual Elimination Entries --Consolidating Entries/Elimination Entries ( SAID. ID. E)