PROBLEM 4 12 Equity Method, Two Consecutive Years LO 5 On January 1, 2017, Parker Company purchased 90% of the outstanding common stock of Sid Company for $180,000. At that time, Sid's stockholders' equity consisted of common stock, $120,000; other contributed capital, $20,000; and retained earnings, $25.000. Assume that any difference between book value of equity and the value implied by the purchase price is attributable to land. On December 31, 2017, the two companies' trial balances were as follows: Parker Sid Cash $ 65,000 $ 35,000 Accounts Receivable 40,000 30,000 Inventory 25,000 15.000 Investment in Sid Company 184,500 Plant and Equipment 110,000 85,000 Land 48,500 45,000 Dividenda Declared 20,000 15.000 Cost of Goods Sold 150,000 60,000 Operating Expenses 35.000 15.000 Total Debits $678,000 $300,000 Accounts Payable $ 20,000 $ 15,000 Other Liabilities 15,000 25,000 Common Stock, par value $10 200,000 120,000 Other Liabilities 15,000 25,000 Common Stock, par value $10 200,000 120,000 Other Contributed Capital 70,000 20,000 Retained Earnings, 1/1 55,000 25,000 Sales 300,000 95,000 Equity in Subsidiary Income 18,000 0 Total Credits $678,000 $300,000 Required: A. Prepare a consolidated statements workpaper on December 31, 2017 B. Prepare a consolidated statements workpaper on December 31, 2018, assuming trial balances for Parker and Sid on that date were: Parker Sid Cash $ 70,000 $ 20,000 Accounts Receivable 60,000 35,000 Inventory 40,000 30,000 Investment in Sid Company 193,500 Plant and Equipment 125,000 90,000 Land 48,500 45,000 Dividends Declared 20,000 15,000 Cost of Goods Sold 160,000 65,000 - X LE Dividends Declared 20,000 15,000 Cost of Goods Sold 160,000 65,000 Operating Expenses 35.000 20.000 Total Debits 37752.000 $320,000 Accounts Payable $ 16,500 $ 16,000 Other Liabilities 15.000 24,000 Common Stock, par value $10 200,000 120,000 Other Contributed Capital 70,000 20,000 Retained Earnings, 1/1 168,000 30,000 Sales 260,000 110,000 Equity in Subsidiary Income 32,500 Total Credits $752,000 $320,000