Partial Consolidation Worksheet Parent Company purchased a 90% interest in Subsidiary Company on January 1, 2011, for $675.000. Any excess cost was attributed to goodwill Equity balances for Subsidiary Company on January 1, 2011 were as follows: Common Stock $200,000 Paid-in Capital 100.000 Retained Earnings 300.000 Subsidiary sold a machine to Parent for $30,000 on January 1, 2014. Subsidiary's cost of the machine was $20,000. The machine has a 5-year life and is being depreciated on a straight-line basis. During 2016, Parent sold merchandise to Subsidiary for $50,000. Parent records a 30% gross profit on the sale. $20,000 of the goods held by Subsidiary, purchased from Parent, is still in inventory at year-end. Subsidiary issued $200,000 of face value, 9% bonds to yield 10% effective interest on January 1, 2008. On December 31, 2015, the amortized balance was $192,418. On December 31, 2015, Parent purchased the bonds for $89.186 to yield 12% effective interest. At the time of the purchase, the bonds had 5 years to maturity. Both companies use effective interest amortization. The trial balances of Parent and Subsidiary are inserted on the partial worksheet attached that is dated December 31, 2016. Required: 1. Assuming net income of $78,625 before salaries and bonus, determine how the income would be allocated among the partners with priority.given to salaries, bonus, and interest in that order. Round amounts to nearest dollar. Salaries Big Salary [ Solect) Little Salary Select) Bonus Big Bonus [ Select) Little Bonus Select) Interest Big Interest Select Select) Little Interest 2. Assuming net loss of $50,000 before salaries and bonus, determine how the net loss would be allocated assuming a priority system is not followed. That is, satisfy all provisions of the profit and loss agreement and use the profit and loss ratios to absorb the losses. Round amounts to nearest dollar. Salaries Big Salary (Select) Little Salary [ Select Bonus Big Bonus Select) Little Bonus Select] Interest Big Interest Select Little Interest Select) Remainder Profit/Loss Big Interest Select) Little Interest Select Partial Consolidation Worksheet Parent Company purchased a 90% interest in Subsidiary Company on January 1, 2011, for $675.000. Any excess cost was attributed to goodwill Equity balances for Subsidiary Company on January 1, 2011 were as follows: Common Stock $200,000 Paid-in Capital 100.000 Retained Earnings 300.000 Subsidiary sold a machine to Parent for $30,000 on January 1, 2014. Subsidiary's cost of the machine was $20,000. The machine has a 5-year life and is being depreciated on a straight-line basis. During 2016, Parent sold merchandise to Subsidiary for $50,000. Parent records a 30% gross profit on the sale. $20,000 of the goods held by Subsidiary, purchased from Parent, is still in inventory at year-end. Subsidiary issued $200,000 of face value, 9% bonds to yield 10% effective interest on January 1, 2008. On December 31, 2015, the amortized balance was $192,418. On December 31, 2015, Parent purchased the bonds for $89.186 to yield 12% effective interest. At the time of the purchase, the bonds had 5 years to maturity. Both companies use effective interest amortization. The trial balances of Parent and Subsidiary are inserted on the partial worksheet attached that is dated December 31, 2016. Required: 1. Assuming net income of $78,625 before salaries and bonus, determine how the income would be allocated among the partners with priority.given to salaries, bonus, and interest in that order. Round amounts to nearest dollar. Salaries Big Salary [ Solect) Little Salary Select) Bonus Big Bonus [ Select) Little Bonus Select) Interest Big Interest Select Select) Little Interest 2. Assuming net loss of $50,000 before salaries and bonus, determine how the net loss would be allocated assuming a priority system is not followed. That is, satisfy all provisions of the profit and loss agreement and use the profit and loss ratios to absorb the losses. Round amounts to nearest dollar. Salaries Big Salary (Select) Little Salary [ Select Bonus Big Bonus Select) Little Bonus Select] Interest Big Interest Select Little Interest Select) Remainder Profit/Loss Big Interest Select) Little Interest Select