Problem 4-6

On January 1, 2011, Plank Company purchased 80% of the outstanding capital stock of Scoba Company for $52,300. At that time, Scobas stockholders equity consisted of capital stock, $54,300; other contributed capital, $5,000; and retained earnings, $4,100. On December 31, 2015, the two companies trial balances were as follows:

		Plank		Scoba
Cash		$41,800		$22,000
Accounts Receivable		21,000		17,100
Inventory		14,900		8,100
Investment in Scoba Company		68,940		0
Land		52,800		47,000
Dividends Declared		9,900		7,760
Cost of Goods Sold		85,400		19,900
Other Expense		10,200		12,100
		$304,940		$133,960
Accounts Payable		$ 11,900		$ 6,000
Other Liabilities		4,900		4,000
Common Stock		101,500		54,300
Other Contributed Capital		19,600		5,000
Retained Earnings, 1/1		49,400		15,200
Sales		103,672		49,460
Equity in Subsidiary Income		13,968		0
		$304,940		$133,960

The accounts payable of Scoba Company include $2,900 payable to Plank Company. (b) Prepare a consolidated statements workpaper at December 31, 2015. Any difference between book value and the value implied by the purchase price relates to subsidiary land. (List items that increase retained earnings first.)