Question

On Jan 1, 2015, Petunia Corp purchased an 70% interest in the common stock of Sunflower Corp. for $350,000.00 Sunflower had the following Balance Sheet on the date of acquisition:

Sunflower Corporation

      Balance Sheet

        Jan 1, 2015                     

Assets:                                                                                    Liabilities & Equity

Accounts Receivable              $40,000.                      Accounts Payable       $42,297

Inventory                                20,000.                       Bonds Payable                       $100,000

Land                                        35,000                        Discount on BP            (2,297)

Buildings                                250,000.                      Common Stk ($10 par) $10,000

Accumulated Depreciation     (50,000)                      Paid in Capital               $90,000

Equipment                              $120,000                     Retained Earnings      $115,000.

Accumulated Depreciation      (60,000)

Total                                       $355,000                     Total                           $355,000

FMV Information:

Inventory                                FMV =$30,000

Buildings                                FMV =$225,000 10 years remaining

Equipment                              FMV =$75,000 5 years remaining

Petunia and Sunflower had the following Trial Balances on Dec 31, 2017

Petunia                  Sunflower

Cash                                                                            $360,070                    $92,032

Inventory                                                                    350,000                       75,000

Investment in Sub                                                       381,270                          0

Buildings                                                                    500,775                      250,000

Accumulated Depreciation                                        ($300,000)                  ($70,000)

Equipment                                                                  200,000                       120,000

Accumulated Depreciation                                        (100,000)                    (84,000)

Accounts Payable                                                       (55,000)                      (25,000)

Bonds Payable                                                                           0                               (100,000)

Discount on Bonds Payable                                          0                               1,640

Common Stock                                                           (100,000)                    (10,000)

Paid-in Capital                                                           (500,000)                    (90,000)

Retained Earnings                                                      (397,000)                    (145,000)

Sales                                                                           (700,000)                    (220,000)

Cost of Goods Sold                                                    210,000                      120,000

Depreciation Expense-Buildings                               30,000                        10,000

Depreciation Expense-Equipment                             15,000                        12,000

Other Expenses                                                           102,155                       53,328

SUB Income                                                             (17,270)                                    0

Dividends Declared                                                    20,000                         10,000

Total                                                                           -0-                             -0-

Prepare the worksheet necessary to produce the Consolidated Financial Statements for Petunia and Sunflower for the year ended Dec 31, 2017. Include the Determination and Distribution of Excess Schedule.

Answer 1