required:

- the pre-liminary computations(allocation of excess fair value over bookvalue)

-excess allocated (undervalued inventory,buildings, equipment.patent and goodwill)

-calculation of income for Sol

-journal entries

Exercise 1 Par Corporation acquired a 70 percent interest in Sol Corporation's outstanding voting common stock on January 1, 2011, for $490,000 cash. The stockholders' equity of Sol on this date consisted of $500,000 capital stock and $100,000 retained earnings. The difference between the fair value of Sol and the underlying equity acquired in Sol was assigned $5,000 to Sol's undervalued inventory, S14,000 to undervalued buildings. $21,000 to undervalued equipment, $60,000 to goodwill. The undervalued inventory items were sold during 2011, and the undervalued buildings and equipment had remaining useful lives of seven years and three years, respectively. Depreciation is straight line. At December 31, 2011, Sol's accounts payable include S10,000 owed to Par. This S10,000 account payable is due on January 15, 2012. Par sold equipment with a book value of $15,000 for $25,000 on June 1, 201 not an intercompany sale transaction. Separate financial statements for Par and Sol for 2011 are summarized as follows (in thousands): Sel S 800 60.2 $700 Combined Income and Retained Earnings Statements for the Year Ended December 31 Sales Income from Sol Gain on equipment Cost of sales Depreciation expense Other expenses Net income Add: Retained eamings January 1 Deduct: Dividends Retained earnings December 31 (300) (155) (160) 255.2 300 (200) $ 355.2 (400) (60) (140) 100 100 (50) SI 50 $ 560 96 100 Balance Sheet af December 31 Cash Accounts receivable-net Dividends receivable Inventories Other current assets Land Buildingsnet Equipment net Investment in Sol Total assets 150 70 100 50 100 160 140 330 570 515.2 $1.705.2 $850 S 85 $ 200 100 Accounts payable Dividends payable Other liabilities Capital stock, SIO par Retained earnings Total equities 1.000 355.2 $1.705.2 500 150 $8.50 REQUIRED Prepare consolidation workpapers for Par Corporation and Sol for the year ended December 31, 2011. Use an unamortized excess account. You must show all adjusting and eliminating entries and the required calculations. Instructions: Cover page and question should be printed. Answer must be hand written on A4 printing papers. Exercise 1 Par Corporation acquired a 70 percent interest in Sol Corporation's outstanding voting common stock on January 1, 2011, for $490,000 cash. The stockholders' equity of Sol on this date consisted of $500,000 capital stock and $100,000 retained earnings. The difference between the fair value of Sol and the underlying equity acquired in Sol was assigned $5,000 to Sol's undervalued inventory, S14,000 to undervalued buildings. $21,000 to undervalued equipment, $60,000 to goodwill. The undervalued inventory items were sold during 2011, and the undervalued buildings and equipment had remaining useful lives of seven years and three years, respectively. Depreciation is straight line. At December 31, 2011, Sol's accounts payable include S10,000 owed to Par. This S10,000 account payable is due on January 15, 2012. Par sold equipment with a book value of $15,000 for $25,000 on June 1, 201 not an intercompany sale transaction. Separate financial statements for Par and Sol for 2011 are summarized as follows (in thousands): Sel S 800 60.2 $700 Combined Income and Retained Earnings Statements for the Year Ended December 31 Sales Income from Sol Gain on equipment Cost of sales Depreciation expense Other expenses Net income Add: Retained eamings January 1 Deduct: Dividends Retained earnings December 31 (300) (155) (160) 255.2 300 (200) $ 355.2 (400) (60) (140) 100 100 (50) SI 50 $ 560 96 100 Balance Sheet af December 31 Cash Accounts receivable-net Dividends receivable Inventories Other current assets Land Buildingsnet Equipment net Investment in Sol Total assets 150 70 100 50 100 160 140 330 570 515.2 $1.705.2 $850 S 85 $ 200 100 Accounts payable Dividends payable Other liabilities Capital stock, SIO par Retained earnings Total equities 1.000 355.2 $1.705.2 500 150 $8.50 REQUIRED Prepare consolidation workpapers for Par Corporation and Sol for the year ended December 31, 2011. Use an unamortized excess account. You must show all adjusting and eliminating entries and the required calculations. Instructions: Cover page and question should be printed. Answer must be hand written on A4 printing papers