Par Corporation acquired its interest in Sal at book value during 2011, when the fair values of Sals assets and liabilities were equal to recorded book values.

Additional informations:

1. Intercompany sales of merchandise between the two affiliates totalled $50,000 during 2012. All intercompany balances have been paid except for $10,000 in transit from Sal to Par at December 31, 2012.

2. Unrealized profits in Sals inventories of merchandise acquired from Par were $12,000 at December 31, 2011, and $15,000 at December 31, 2012.

3. Sal sold equipment with a six-year remaining useful life to Par on Jan. 2, 2010, at a gain of $24,000. The equipment is still in use by Par.

4. Par sold a plant to Sal on July 1, 2012. The land was sold at a gain of $10,000 & the building, which had a remaining useful life of 10 years, at a gain of $20,000.00

5. Sal purchased $100,000 par of Par 10 percent bonds in the open market for $94,000 plus $5,000 accrued interest on December 31, 2012. Interest is paid semiannually on January 1 and July 1, and the bonds mature on January 1, 2017.

Required: Prepare a consolidation workpaper for Par Corporation and Subsidiary for the year ended December 31, 2012

NOTE: don't forget to put Adjustment and Elimination, and Journal Working Note for it!!!

Promise for thumbs up for you

Financial statements for Par Corporation and its 75 percent- owned subsidiary, Sal Corporation, for 2012 are summarized as follows (in thousands): Income Statement data in (000) Par Sal 75% Sales 630 500 Gain on Land/Build 30 Income from Sal 52 Cost of sales 350 300 Depreciation expense 76 40 Interest expense 20 Other expense 46 60 Net Income 220 100 Add: Beginning RE 150 100 Deduct:Dividends 160 80 Retained Earnings Dec. 31 210 120 MAC 27 81 5 40 30 80 50 70 90 150 180 140 90 Balance Sheet Cash Bond interest receivable Other receivables Inventories Land Buildings net Equipment - net Investment in Sal stock Investment in Par bonds Total Assets Accounts payable Bond interest payable 10% bonds payable Common stock Retained earnings Total Liabiities & Equity 343 94 870 600 80 50 10 200 400 400 210 120 870 600