Problem 11-3 (LO 3, 5) Translate a trial balance and prepare a consolidation worksheet with excess of cost over book value traceable to equipment. Due to increasing pressures to expand globally, Pueblo Corporation acquired a 100% interest in Soren- son Company, a foreign company, on January 1, 2016. Pueblo paid 12,000,000 FC, and Soren- son's equity consisted of the following: Common stock... Paid-in capital in excess of par ........ Retained earnings .......... Total......................................... 3,000,000 FC 2,000,000 4,200,000 9,200,000 FC On the date of acquisition, equipment with a 10-year life was undervalued by 500,000 FC. Any remaining excess of cost over book value is attributable to additional equipment with a 20-year life. The trial balances for Pueblo and Sorenson as of December 31, 2018, are as follows: Pueblo Corporation Sorenson Company Cash ............ 4,050,000 2,840,000 FC Accounts Receivable .......... 5,270,000 3,990,000 Inventory ............... 5,540,000 5,800,000 Investment in Sorenson ......... 20,969,000 Fixed Assets ................. 21,000,000 15,000,000 Accumulated Depreciation .... (12,560,000) (6,800,000) Accounts Payable (3,450,000) (1,580,000) Long-Term Debt (10,000,000) (5,000,000) Common Stock (4,000,000) 13,000,000) Paid In Capital in Excess of Par ....... 16,500,000) 12,000,000) Retained Earnings, January 1, 2018.... (12,180,000) 17,950,000) Part 2 MULTINATIONAL ACCOUNTING AND OTHER REPORTING Cove Sales ...... Cost of Goods Sold.... Operating Expenses .... Subsidiary Income............ Totals. .............. .... (26,000,000) 16,380,000 3,210,000 (1,729,000) 110,000,000) 7,500,000 1,200,000 ........ O FC . The investment in Sorenson consists of the following: $14,400,000 Initial investment (12,000,000 FC x $1.20)............ 2016 Income (1,750,000 FC x $1.28)........... 2,240,000 2017 Income (2,000,000 FC $1.30).......... 2,600,000 2018 Income... 1,729,000 Total..... $20,969,000 Relevant exchange rates are as follows: 1FC = January 1, 2016... $1.20 2016 Average...... 1.28 January 1, 2017.... 1.25 2017 Average... 1.30 December 31, 2018............ 1.31 2018 Average....... 1.33 Assuming the FC is Sorenson's functional currency, prepare a consolidated worksheet. ed