The audit of Barns Company and its subsidiaries for the year ended December 31, 2012, is completed. The working papers contain the following information:
a. Barns Company acquires 4,000 shares of Webo Company common stock for $320,000 on January 1, 2011. Webo Company purchases 500 shares of its own stock from NCI shareholders as treasury shares for $48,000 on January 1, 2012.
b. Barns Company acquires all 8,000 outstanding shares of Elcam Company stock on January 1, 2011, for $600,000. On January 1, 2012, Elcam Company issues through a private sale 2,000 additional shares to new non-controlling shareholders at $85 per share. Barns have no investments other than the stock of Webo and Elcam.
c. Elcam Company originally issues $200,000 of 10-year, 8% mortgage bonds at 98, due on January 1, 2015. On January 1, 2012, Webo Company purchases $150,000 of these bonds in the open market at 98. Interest on the bonds is paid each June 30 and December 31.
d. Condensed balance sheets of Webo and Elcam on January 1, 2011, and January 1, 2012, are as follows:

e. Total dividends declared and paid during 2012 are as follows:
Barns Company .......... $24,000
Webo Company .......... 22,500
Elcam Company .......... 10,000
f. On June 30, 2012, Barns sells equipment with a book value of $8,000 to Webo for $10,000. Webo depreciates equipment by the straight-line method based on a 10-year life.
g. Barns Company consistently sells to its subsidiaries at prices that realize a gross profit of 25% on sales. Webo and Elcam companies sell to each other and to Barns Company at cost. Prior to 2012, intercompany sales are negligible, but the following sales are made during 2012:

h. At December 31, 2012:
Barns Company owes Webo Company ...... $24,000
Webo Company owes Elcam Company ...... 16,000
Elcam Company owes Barns Company ...... 12,000
Total ................... $52,000
i. The following trial balances as of December 31, 2012, are prepared:
QUESTION CONTINUE TO NEXT PAGE

Required
Prepare the worksheet necessary to produce the consolidated financial statements of Barns Company and its subsidiaries for the year ended December 31, 2012. Include the determination and distribution of excess and income distribution schedules. Any excess of cost over book value is attributable to goodwill. All bond discounts are assumed to be amortized on a straight-line basis.

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Webo Company Elcam Company Jan. 1, 2011 Jan. 1, 2012 $225,000 350,000 Jan. 1, 2011 $280,400 613,000 1,600 $895,000 Jan. 1, 2012 $205,000 623,800 1,200 $830,000 Property, plant, and equipment. .. 305,000 $575,000 $125,000 95,000 $105,000 200,000 400,000 125,000 $895,000 $830,000 Bonds payable 250,000 150,000 250,000 200,000 $575,000 200,000 400,000 200,000 Included in Purchaser's Inventory ot December 31, 2012 $20,000 40,000 Total Sales $172,000 160,000 25,000 28,000 $385,000 om 5,000 8,000 $73,000 Barns Webo cam Company 165,200 105,000 150,000 ompany Invenfories Investment in Webo Company Stock.. Investment in Elcam Company Stock.... Investment in Elcam Company Bonds 110,000 85,000 138,000 320,000 600,000 26,000 73,500 163,000 . 148,000 525,000 (325,000) (202,000) 50,500) 700,000 (402,000) 834,000 (240,000) (86,900 Accounts Payable (12,000) (400,000) (200,000) 800 (500,000) (70,000) (302,200) (200,000 125,000) 10,000 Unamortized Bond Discount (600,000)(250,000) Retained Earnings, January 1, 2012.. .. 22,500 48,000 24,000 Gain on Sale of Equipment. Sales .. (2,000) (2,950,000 ,550,000) ,750,000) (13,000] (28,000) 2,500,000 405,000 16,200 1,200,000 280,000 2,500 0 1,400,000 290,500 16,400 0 Interest Expense...