Parent LTD. Purchases an 80% interest in Sub Inc. for $850,000 on January 1, 2015. The estimated fair value of the NCI is $190,000. On the purchase date, Sub Inc. has the following stockholders equity:

Common Stock......... $150,000

Paid-in capital in excess of par......... 200,000

Retained Earnings....... 400,000

$750,000

Also on the purchase date, it is determined that Sub Inc.s assets are understated as follows:

Equipment, 10 year-remaining life $80,000

Land. 20,000

Building, 20-year remaining life.. 60,000

The remaining excess of cost over book value is attributed to goodwill. The following summarized statements for Parent and Sub are for the year ended December 31, 2017:

Parent Sub

Ltd. Inc.

Income Statements:

Sales..................... (650,000) (320,000)

Cost of Goods Sold..................... 260,000 240,000

Operating Expenses...................... 170,000 70,000

Depreciation Expense...................... 65,000 30,000

Subsidiary (Income)/Loss...................... 24,800

Net (Income)/Loss...................... (130,200) 20,000

Retained Earnings:

Retained Earnings, January 1, 2017 Parent. (625,000)

Retained Earnings, January 1, 2017 Subsidiary (460,000)

Net (Income)/Loss..... (130,200) 20,000

Dividends Declared.................................................. 10,000

Retained Earnings, December 31, 2017................ (755,200) (430,000)

Balance Sheets:

Cash......................................................................... 288,000 170,000

Inventory................................................................. 152,600 400,000

Land......................................................................... 145,000 150,000

Building.................................................................... 900,000 500,000

Accumulated Depreciation Building..................... (345,000) (360,000)

Equipment ... .................. 350,000 250,000

Accumulated Depreciation- Equipment. (135,000) (90,000)

Investment in Sub.. 847,600

Liabilities.................................................................. (248,000) (40,000)

Bonds Payable.......................................................... (200,000)

Common Stock Parent........................................... (1,200,000)

Common Stock Sub..................................... (150,000)

Paid-In Capital in Excess of Par................................. (200,000)

Retained Earnings, December 31, 2017................... (755,200) (430,000)

Balance.................................................................. 0 0

Prepare a purchase analysis, distribution of goodwill and a consolidated worksheet for December 31, 2017.