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Sanur Corporation acquired a 75 percent interest in Par Corporation on January 1, 2018. Financial statements of Sanur and Par Corporations for the year 2018

Sanur Corporation acquired a 75 percent interest in Par Corporation on January 1, 2018. Financial statements of Sanur and Par Corporations for the year 2018 are as follows (in thousands): (15 Marks)

Combined Income and Retained Earnings

Statements for the Year Ended December 31

Sanur ($)

Par($)

Sales

$1,600

$400

Income from Par

55.2

Cost of sales

(1,000)

(200)

Other expenses

(388)

(104)

Net income

267.2

96

Add: Retained earnings January 1

720

136

Deduct: Dividends

(200)

(64)

Retained earnings December 31

787.2

168

Balance Sheet at December 31

Cash

$ 212

$ 60

Accounts receivablenet

344

80

Dividends receivable from Par

24

Inventories

380

40

Note receivable from Sanur

20

Land

260

120

Buildingsnet

680

320

Equipmentnet

520

200

Investment in Par

727.2

Total assets

$3,147.2

$840

Accounts payable

$ 340

$ 40

Note payable to Par

20

Dividends payable

32

Capital stock, $10 par

2,000

600

Retained earnings

787.2

168

Total equities and liabilities

$3,147.2

$840

Required:

  1. Prepare all the required journal entries for consolidated work paper.

2. Prepare consolidation work papers for Sanur Corporation and Subsidiary for the year ended December 31, 2018. Only the information provided in the financial statements is available; accordingly, your solution will require some standard assumptions. Par owned unrecorded copyrights having a fair value of $224,000, and a useful life of 10 years.

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