Use the following information for Problems 4-3 and 4-4: On January 1, 2015, Packard Corporation acquired 70% of the common stock of Stude Corporation for $400,000. On this date, Stude had the following balance sheet: Assets Accounts receivable . . . . . . Inventory ............... Land................... Buildings ............... Accumulated depreciation . Equipment .............. Accumulated depreciation . Totalassets............ $ 60,000 40,000 60,000 200,000 (50,000) 72,000 (30,000) $352,000 Liabilities and Equity Accountspayable ........... Bondspayable ............. Commonstock($1par)....... Paid-in capital in excess of par. . Retainedearnings........... Total liabilities and equity . . . $ 40,000 100,000 10,000 90,000 112,000 $352,000 Stude Corporation Balance Sheet January 1, 2015 Buildings, which have a 20-year life, were understated by $150,000. Equipment, which has a 5-year life, was understated by $60,000. The 3,000 NCI shares had a fairvalue of $50 each. Any remaining excess was considered to be goodwill. Packard used the simple equity method to account for its investment in Stude. Packard and Stude had the following trial balances on December 31, 2016: Cash .............................. AccountsReceivable.................. Inventory ........................... Land............................... InvestmentinStude ................... Buildings ........................... AccumulatedDepreciation ............. Equipment.......................... AccumulatedDepreciation ............. AccountsPayable .................... BondsPayable....................... CommonStock ...................... Paid-InCapitalinExcessofPar .......... Retained Earnings, January 1, 2016. . . . . . Sales .............................. CostofGoodsSold................... Depreciation ExpenseBuildings . . . . . . . . Depreciation ExpenseEquipment. . . . . . . OtherExpenses...................... InterestExpense...................... SubsidiaryIncome.................... DividendsDeclared................... Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . Packard Corporation 66,000 90,000 120,000 100,000 428,000 800,000 (220,000) 150,000 (90,000) (60,000) (100,000) (800,000) (325,000) (800,000) 450,000 30,000 15,000 140,000 Stude Corporation 132,000 45,000 56,000 60,000 200,000 (65,000) 72,000 (46,000) (102,000) (100,000) (10,000) (90,000) (142,000) (350,000) 208,500 7,500 8,000 98,000 8,000 Problem 4-3 (LO 2) 70%, equity, beginning and ending inventory, subsidiary seller. Refer to the preceding facts for Packards acquisition of Stude common stock. On Jan- uary 1, 2016, Packard held merchandise acquired from Stude for $10,000. This beginning inventory had an applicable gross profit of 25%. During 2016, Stude sold $40,000 worth of merchandise to Packard. Packard held $6,000 of this merchandise at December 31, 2016. This ending inventory had an applicable gross profit of 30%. Packard owed Stude $11,000 on December 31 as a result of these intercompany sales.

Required 1. Prepare a value analysis and a determination and distribution of excess schedule for the investment in Stude.

2. Complete a consolidated worksheet for Packard Corporation and its subsidiary Stude Corporation as of December 31, 2016. Prepare supporting amortization and income distribution schedules. Problem 4-4 (LO 2) 70%, equity, beginning and ending inventory, parent and subsidiary seller. Refer to the preceding facts for Packards acquisition of Stude common stock. On January 1, 2016, Packard held merchandise acquired from Stude for $10,000. This beginning inventory had an applicable gross profit of 25%. During 2016, Stude sold $40,000 worth of merchandise to Packard. Packard held $6,000 of this merchandise at December 31, 2016. This ending inventory had an applicable gross profit of 30%. Packard owed Stude $11,000 on December 31 as a result of this intercompany sale. On January 1, 2016, Stude held merchandise acquired from Packard for $20,000. This beginning inventory had an applicable gross profit of 40%. During 2016, Packard sold $60,000 (14,000) 20,000 10,000 0 0Refer to the preceding facts for Packards acquisition of Stude common stock. On Jan- uary 1, 2016, Packard held merchandise acquired from Stude for $10,000. This beginning inventory had an applicable gross profit of 25%. During 2016, Stude sold $40,000 worth of merchandise to Packard. Packard held $6,000 of this merchandise at December 31, 2016. This ending inventory had an applicable gross profit of 30%. Packard owed Stude $11,000 on December 31 as a result of these intercompany sales. Required 1. Prepare a value analysis and a determination and distribution of excess schedule for the investment in Stude. 2. Complete a consolidated worksheet for Packard Corporation and its subsidiary Stude Corporation as of December 31, 2016. Prepare supporting amortization and income distribution schedules.