1. Prepare all the elimination and adjustments that would be made on the 2015 consolidated worksheet using the cost method.

Exercise 7 ( LO 3) Cost method, first year, eliminations, statements. (Note: Read carefully, as this is not the same as Exercise 3 or 5.) Parker Company acquires an 80% interest in Sargent Company for $300,000 in cash on January 1, 2015, when Sargent Company has the following balance sheet: The excess of the price paid over book value is attributable to the fixed assets, which have a fair value of $250,000, and to goodwill. The fixed assets have a 10 -year remaining life. Parker Company uses the cost method to record its investment in Sargent Company. The following trial balances of the two companies are prepared on December 31, 2015