Purple and Sunshine had the following trial balances on December 31, 2016 (end of second year):

	Purple Rain	Sunshine
Cash	24,000	132,000
Accounts receivable	90,000	45,000
Inventory	120,000	56,000
Land	100,000	60,000
Investment in Sunshine	512,000
Buildings	800,000	200,000
Accumulated depreciation - bldgs.	-220,000	-65,000
Equipment	150,000	72,000
Accumulated depreciation - equip.	-90,000	-46,000
Goodwill
Accounts payable	-60,000	-102,000
Bond payable		-100,000
Common stock - Sunshine		-10,000
Paid-in capital in excess of par - Sunshine		-90,000
Retained earnings - Sunshine		-142,000
Common stock - Purple	-100,000
Paid-in capital in excess of par - Purple	-800,000
Retained earnings- Purple	-365,000
Sales	-800,000	-350,000
Cost of goods sold	450,000	208,500
Depr. expense - building	30,000	7,500
Depr. expense - equipment	15,000	8,000
Other expenses	160,000	98,000
Interest expense		8,000
Gain on fixed asset sale	-20,000
Subsidiary income	-16,000
Dividends declared - Sunshine		10,000
Dividends declared - Purple	20,000
Totals	0	0

1. Prepare a value analysis and determination of distribution of excess schedule for the investment in Sunshine on January 1, 2015.
2. Write out the elimination entries (in journal form) for the December 31, 2016 consolidation.
3. Prepare the consolidated worksheet as of December 31, 2016, including the income distribution schedule. (The trial balance above is also attached in Excel format.)

7. On January 1, 2015, Purple Rain Company acquired Sunshine Company. Purple Rain Company paid $60 per share for 80% of Sunshine's common stock. The price paid by Purple reflected a control premium. The NCI shares were estimated to have a market value of $55 per share. On the date of acquisition, Sunshine had the following balance sheet: Sunshine Company Balance Sheet 1-Jan-15 $ Assets Accounts Receivable Inventory Land Buildings Accumulated Depreciation Equipment Accumulated Depreciation 60,000 40,000 60,000 200,000 (50,000) 72,000 (30,000) Liabilities and Equity Accounts Payable $ 40,000 Bonds Payable 100,000 Common Stock ($1 par) 10,000 Paid in excess of par 90,000 Retained Earnings 112,000 Total Assets $ 352,000 $ 352,000 Buildings, which have a 20-year life, were understated by $120,000. Equipment, which has a 5-year life was understated by $40,000. Any remaining excess was considered goodwill. Purple used the simple equity method to account for its investment in Sunshine. January 1, 2016, Purple held merchandise sold to it from Sunshine for $12,000. This beginning inventory had an applicable gross profit of 20%. During 2016, Sunshine sold merchandise to Purple for $90,000. On December 31, 2016, Purple held $18,000 of this merchandise in its inventory (applicable gross profit rate of 25%). Purple owed Sunshine $20,000 on December 31, 2016 as a result of this intercompany sale. On January 1, 2016, Purple sold equipment with a book value of $35,000 to Sunshine for $45,000. Purple also sold assets to nonaffiliates. During 2016, the equipment was used by Sunshine. Depreciation is computed over a 5-year life, using the straight-line method. 7. On January 1, 2015, Purple Rain Company acquired Sunshine Company. Purple Rain Company paid $60 per share for 80% of Sunshine's common stock. The price paid by Purple reflected a control premium. The NCI shares were estimated to have a market value of $55 per share. On the date of acquisition, Sunshine had the following balance sheet: Sunshine Company Balance Sheet 1-Jan-15 $ Assets Accounts Receivable Inventory Land Buildings Accumulated Depreciation Equipment Accumulated Depreciation 60,000 40,000 60,000 200,000 (50,000) 72,000 (30,000) Liabilities and Equity Accounts Payable $ 40,000 Bonds Payable 100,000 Common Stock ($1 par) 10,000 Paid in excess of par 90,000 Retained Earnings 112,000 Total Assets $ 352,000 $ 352,000 Buildings, which have a 20-year life, were understated by $120,000. Equipment, which has a 5-year life was understated by $40,000. Any remaining excess was considered goodwill. Purple used the simple equity method to account for its investment in Sunshine. January 1, 2016, Purple held merchandise sold to it from Sunshine for $12,000. This beginning inventory had an applicable gross profit of 20%. During 2016, Sunshine sold merchandise to Purple for $90,000. On December 31, 2016, Purple held $18,000 of this merchandise in its inventory (applicable gross profit rate of 25%). Purple owed Sunshine $20,000 on December 31, 2016 as a result of this intercompany sale. On January 1, 2016, Purple sold equipment with a book value of $35,000 to Sunshine for $45,000. Purple also sold assets to nonaffiliates. During 2016, the equipment was used by Sunshine. Depreciation is computed over a 5-year life, using the straight-line method