Wayne Company purchased 100% of Schuster Company on January 1, 20X1 for $800,000 when the book value of Schuster was $750,000 with the excess caused by a patent that was undervalued by $50,000. The patent had a five year life. In 20x2 (year 2) Wayne sold inventory to Schuster still in the inventory of Schuster at year end with a profit of $3,000. During 20x3, (year 3) Wayne sold inventory to Schuster at a cost of $20,000 for $30,000. At December 31, 20x3, Schuster still had $6,000 cost to Schuster of that inventory on hand in its inventory.

The income statements and balance sheets for the two companies for 20X3 are shown below:

Dr. Cr Consolidated Complete the consolidated worksheet. Wayne Schuster Sales 300,000 100,000 Cost of Goods Sold 60,000 40,000 240,000 60,000 Expenses 40,000 10,000 Income from S Total Income 50,000 Begin. RE Dividends End. RE 800,000 20,000 730,000 10,000 770,000 Cash Receivables Inventory Propety/Equipment Accumulated Depr Patents 100,000 70,000 50,000 500,000 -100,000 0 100,000 100,000 50,000 900,000 -100,000 50,000 Investment in s 988,000 1,608,000 1,100,000 Liabilities Capital Stock Retained Earnings 287,000 130,000 200,000 770,000 1,608,000 1,100,000