PLEASE CHECK IF MY ANSWERS ARE CORRECT.

1. On January 1, 20X1, Prange Company acquired 100% of the common stock of Seaman Company for $600,000. On this date Seaman had total owners' equity of $400,000. Any excess of cost over book value is attributable to a patent, which is to be amortized over 10 years.

During 20X1 and 20X2, Prange has appropriately accounted for its investment in Seaman using the simple equity method.

On January 1, 20X2, Prange held merchandise acquired from Seaman for $30,000. During 20X2, Seaman sold merchandise to Prange for $100,000, of which $20,000 is held by Prange on December 31, 20X2. Seaman's gross profit on all sales is 40%.

On December 31, 20X2, Prange still owes Seaman $20,000 for merchandise acquired in December.

ConsolNCI Net Inc Account Tles NCiControl. Consol R.E. Bal. Sht Cr 8.IIO 20,000 E0 I0O 450 000 200 000 December 31 Other CuTnt Assets Lvestment in Sb 100.00O 207,000 710,000 105.,000 325.000 197.00O 512.000 140,000 8I I0O 340 000 130.000 220.000 655000 315,000 20,000 150,00O 200 000 40000 180.00O CuTent Liabiies 20,000 100.000 100.000 Tem Liabiies Common Stock P Co Other Paidin 100.000 100.000 20,000 12.000 Common Stock-S Co Other Paidin 150,00O 100.000 150,00O 100.00O 200 000 Net Sales Cost of Goods Sold 100.00O 8.IIO 20,000 SO 0MO 3EI 000 22B.I0O 12000 484 000 100.00O 140,000 62.000 22000 E0 I0O Dividends Decared s Co 30,000 30,000 E0 I0O 174.000 174.000 174.000 Total NCI Ret. Eam. Contr. t. 12-31 574,000 (574.004O 920.000 920.000 (CY) minate the current-year entnes made in the stment account and nte subsidiary nome account EL)ETTate the Seaman Company equ ty balances at the begning uf the year against the iwestment acCou (D) Dismbute the S200,000 excess of cost over book vatue to patent (A) Amortize the patent over 10 years, wth $20,000for 20X1 charged to retained eamings, and S20,000 tor 201x2 to operaling expenses Eiminate the $12,000 of goss put in the begming ventory S) Eiminate the entire iteacompany sales of $100,000 Eiminate the B,000 of guss pu in the endin ventory A)Eiminate the S20,000 nteacompany accouts recevable and payable