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Workpapers in year of acquisition (excess recorded for inventory, building, equipment, patents and goodwill) Par Corportion acquired a 70 percent Su oa January 1,2011,for S980,000

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Workpapers in year of acquisition (excess recorded for inventory, building, equipment, patents and goodwill) Par Corportion acquired a 70 percent Su oa January 1,2011,for S980,000 cash.The stockholders' equity (book value) of Sul on this date con- isted of S1,000,000 capital stock and $200,000 retained earnings. The differences between the fair value of Sul and the book value of Sul were assigned o undervalued buildings, $42,000 to undervalued equipmen, and trademarks. Any remaining excess is goodwill. nterest in Sul Corporation's outstanding voting common stock 10,000 to Sul's undervalued inventory, $28,000 S80,000 to previously unrecorded 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. The trademarks have a 40-year life. Depreciation is straight line. At December 31, 2011, Sul's accounts payable include S20.000 owed to ParThis S20,000 account payable is due on January 15,2012. Separale financial statements for Par and Sul for 2011 are summarized as follows (in thousands): Sul Combined Income and Retained Earnings Statements for the Year Ended December 31 S1,600 $1.400 Income from Sul Cost of sales Deprecialion expense Oher expenses 119 (308) 491 (800) (120) Net incomc Add: Retained earnings January 1 Deduct: Dividends 200 200 600 Relained earnings December 3 Balance Sheet at December 31 Cash Dividends receivable Other curent assets S 172 S 120 140 200 28 200 140 1,140 1,029 Lnvesument in Su Total asses Accounts payable Dividends payable Other liabilities Capital stock, $20 par Retained earnings S 400 S 170 190 ,000 98 Total equities REQUIRED: Prepare consolidation December 31.2011. Use an unamortized excess account. for Par Corporatioo and Subsidiary for the year ended

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