Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $109,600. At that date, the fair value of Saver's buildings and equipment was $15,000 more than the book value. Accumulated depreciation on this date was $15,000. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price’s management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $2,600. No additional impairment occurred in 20X9.

Trial balance data for Price and Saver on December 31, 20X9, are as follows:

	Price Corporation								Saver Company
Item	Debit			Credit					Debit			Credit
Cash	$	51,500							$	33,000
Accounts Receivable		92,000								20,000
Inventory		104,000								30,000
Land		52,000								31,000
Buildings & Equipment		361,000								153,000
Investment in Saver Company		124,100
Cost of Goods Sold		138,000								106,000
Wage Expense		30,000								15,000
Depreciation Expense		20,000								10,000
Interest Expense		7,000								4,000
Other Expenses		18,000								11,000
Dividends Declared		32,000								45,500
Accumulated Depreciation					$	155,000							$	35,000
Accounts Payable						47,000								15,000
Wages Payable						14,000								4,000
Notes Payable						147,000								103,500
Common Stock						182,000								53,000
Retained Earnings						127,100								41,000
Sales						298,000								207,000
Income from Saver Company						59,500
	$	1,029,600			$	1,029,600			$	458,500			$	458,500

Required:
a. Prepare all consolidating entries needed to prepare a three-part consolidation worksheet as of December 31, 20X9. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1a) Record the basic consolidation entry.

2a) Record the amortized excess value reclassification entry.

3a) Record the excess value (differential) reclassification entry.

4a) Record the optional accumulated depreciation consolidation entry.

b. Prepare a three-part consolidation worksheet for 20X9. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)

c-1. Prepare a consolidated balance sheet for 20X9. (Amounts to be deducted should be indicated with a minus sign.)

c-2. Prepare a consolidated income statement for 20X9.

c-3. Prepare a retained earnings statement for 20X9.

  
 
 

PRICE CORPORATION AND SUBSIDIARY Consolidated Financial Statements Worksheet December 31, 20X9 Consolidation Entries Price Corp. Saver Co. DR CR Consolidated Income Statement Sales Less: COGS Less: Wage expense Less: Depreciation expense Less: Interest expense Less: Other expenses Income from Saver Co. Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Assets Cash Accounts receivable Inventory Land Buildings & equipment Less: Accumulated depreciation Investment in Saver Co. Goodwill Total Assets Liabilities & Stockholders' Equity Accounts payable Wages payable Notes payable Common stock Retained earnings Total Liabilities & Equity