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Problem 8-3 (LO 2) Worksheet, subsidiary stock sale, intercompany merchandise. On January 1, 2016, Palo Company acquires 80% of the outstanding common stock of Sheila

Problem 8-3 (LO 2) Worksheet, subsidiary stock sale, intercompany merchandise. On January 1, 2016, Palo Company acquires 80% of the outstanding common stock of Sheila Company for $700,000. On January 1, 2018, Sheila Company sells 25,000 shares of common stock to the public at $12 per share. Palo Company does not purchase any of these shares. No entry has been made by the parent. Sheila Company has the following stockholders equity at the end of 2015 and 2017:

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Please provide

1. Determination/distribution of excess schedule

2. Income Distribution Schedule

3. Consolidated Worksheet

4. Eliminations and adjustments

Problem 8-3 (LO 2) Worksheet, subsidiary stock sale, intercompany merchandise On January 1, 2016, Palo Company acquires 80% of the outstanding common stock of Sheila Company for $700,000 On January 1, 2018, Sheila Company sells 25,000 shares of common stock to the public at $12 per share. Palo Company does not purchase any of these shares. No by the parent. Sheila Company has the following stockholders' equity at the end of 2015 and 2017: entry has been made December 31 2015 400,000 400,000 2017 Paid-in capital in excess of par . . . . . . . . .. . .. 00,000 180,000 On the January 1, 2016, acquisition date, Sheila Company's book values approximate fair values, except for a building that is undervalued by $80,000. The building has an estimated future life of 20 years. Any additional excess is attributed to goodwill. Trial balances of the two companies as of December 31, 2018, are as follows: Palo Sheila Cash. Inventory Property, Plant, and Equipment. . . . .. Company 179,040 280,000 325,000 700,000 Company 105,000 190,000 175,000 2,450,000 ,400,000 . (750,000 (210,000) Common Stock ($2 par) Paid-n Capital in Excess of Par Retained Earnings, January 1, 2018 Sales (250,000) (650,000) (375,000] 180,000) 123,0401 1,120,000 405,000 45,000 0 450,000 220,000 36,000 Problem 8-3 (LO 2) Worksheet, subsidiary stock sale, intercompany merchandise On January 1, 2016, Palo Company acquires 80% of the outstanding common stock of Sheila Company for $700,000 On January 1, 2018, Sheila Company sells 25,000 shares of common stock to the public at $12 per share. Palo Company does not purchase any of these shares. No by the parent. Sheila Company has the following stockholders' equity at the end of 2015 and 2017: entry has been made December 31 2015 400,000 400,000 2017 Paid-in capital in excess of par . . . . . . . . .. . .. 00,000 180,000 On the January 1, 2016, acquisition date, Sheila Company's book values approximate fair values, except for a building that is undervalued by $80,000. The building has an estimated future life of 20 years. Any additional excess is attributed to goodwill. Trial balances of the two companies as of December 31, 2018, are as follows: Palo Sheila Cash. Inventory Property, Plant, and Equipment. . . . .. Company 179,040 280,000 325,000 700,000 Company 105,000 190,000 175,000 2,450,000 ,400,000 . (750,000 (210,000) Common Stock ($2 par) Paid-n Capital in Excess of Par Retained Earnings, January 1, 2018 Sales (250,000) (650,000) (375,000] 180,000) 123,0401 1,120,000 405,000 45,000 0 450,000 220,000 36,000

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