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Paro Solar Statement Accounts Company Company Income Statement: Net Sales .... (520,000) 300,000 120,000 (72,000) (450,000) 260,000 100,000 Cost of Goods Sold Operating Expenses Subsidiary Income Noncontrolling Interest in Income Net Income... (172,000) (90,000) Retained Earnings Statement: Balance, January 1, 2016–Paro Company... Balance, January 1, 2016–Solar Company Net Income (from above)...... Dividends Declared Paro Company Dividends Declared Solar Company (214,000) (190,000) (90,000) (172,000) 50,000 30,000 (250,000) Balance, December 31, 2016.... (336,000) Consolidated Balance Sheet: Inventory, December 31, 2016. Other Current Assets ... Investment in Solar Company Land.... 100,000 50,000 136,000 180,000 400,000 50,000 50,000 Paro Solar Statement Accounts Company Company Building and Equipment. Accumulated Depreciation Goodwill ...... Other Intangibles . Current Liabilities . Bonds Payable.. Other Long-Term liabilities. Common Stock Paro Company. Other Paid-In Capitalin Excess of Par-Paro Company . Common Stock-Solar Company . Other Paid-In Capitalin Excess of Par-Solar Company.. Retained Earnings, December 31, 2016 (from above) . 350,000 (100,000) 320,000 (60,000) 20,000 (120,000) (40,000) (100,000) (200,000) (200,000) (100,000) (50,000) (100,000) (250,000) (336,000) ... Totals .

Paro Solar Statement Accounts Company Company Income Statement: Net Sales .... (520,000) 300,000 120,000 (72,000) (450,000) 260,000 100,000 Cost of Goods Sold Operating Expenses Subsidiary Income Noncontrolling Interest in Income Net Income... (172,000) (90,000) Retained Earnings Statement: Balance, January 1, 2016–Paro Company... Balance, January 1, 2016–Solar Company Net Income (from above)...... Dividends Declared Paro Company Dividends Declared Solar Company (214,000) (190,000) (90,000) (172,000) 50,000 30,000 (250,000) Balance, December 31, 2016.... (336,000) Consolidated Balance Sheet: Inventory, December 31, 2016. Other Current Assets ... Investment in Solar Company Land.... 100,000 50,000 136,000 180,000 400,000 50,000 50,000 Paro Solar Statement Accounts Company Company Building and Equipment. Accumulated Depreciation Goodwill ...... Other Intangibles . Current Liabilities . Bonds Payable.. Other Long-Term liabilities. Common Stock Paro Company. Other Paid-In Capitalin Excess of Par-Paro Company . Common Stock-Solar Company . Other Paid-In Capitalin Excess of Par-Solar Company.. Retained Earnings, December 31, 2016 (from above) . 350,000 (100,000) 320,000 (60,000) 20,000 (120,000) (40,000) (100,000) (200,000) (200,000) (100,000) (50,000) (100,000) (250,000) (336,000) ... Totals .

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 54CE
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On January 1,  2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000.
On this date, Solar has common stock, other paid-in capital in excess of par, and retained earnings  of $50,000, $100,000, and $150,000, respectively. Net income and dividends for two years  for Solar Company are as follows:
                                                                2015            2016
Net income . . . . . . . . . . . . . . . . . . . . . . $60,000          $90,000
Dividends. . . . . . . . . . . . . . . . . . . . . . . . 20,000              30,000
On January 1, 2015, the only undervalued tangible assets of Solar are inventory and the  building. Inventory, for which FIFO is used, is worth $10,000 more than cost. The inventory is  sold in 2015. The building, which is worth $30,000 more than book value, has a remaining life  of 10 years, and straight-line depreciation is used. The remaining excess of cost over book value  is attributable to goodwill.
1. Using this information or the information in the following statements for the year ended  December 31, 2016, prepare a determination and distribution of excess schedule.
2. Complete the vertical worksheet for consolidated financial statements for 2016.

Paro Solar Statement Accounts Company Company Income Statement: Net Sales .... (520,000) 300,000 120,000 (72,000) (450,000) 260,000 100,000 Cost of Goods Sold Operating Expenses Subsidiary Income Noncontrolling Interest in Income Net Income... (172,000) (90,000) Retained Earnings Statement: Balance, January 1, 2016–Paro Company... Balance, January 1, 2016–Solar Company Net Income (from above)...... Dividends Declared Paro Company Dividends Declared Solar Company (214,000) (190,000) (90,000) (172,000) 50,000 30,000 (250,000) Balance, December 31, 2016.... (336,000) Consolidated Balance Sheet: Inventory, December 31, 2016. Other Current Assets ... Investment in Solar Company Land.... 100,000 50,000 136,000 180,000 400,000 50,000 50,000
Transcribed Image Text:Paro Solar Statement Accounts Company Company Income Statement: Net Sales .... (520,000) 300,000 120,000 (72,000) (450,000) 260,000 100,000 Cost of Goods Sold Operating Expenses Subsidiary Income Noncontrolling Interest in Income Net Income... (172,000) (90,000) Retained Earnings Statement: Balance, January 1, 2016–Paro Company... Balance, January 1, 2016–Solar Company Net Income (from above)...... Dividends Declared Paro Company Dividends Declared Solar Company (214,000) (190,000) (90,000) (172,000) 50,000 30,000 (250,000) Balance, December 31, 2016.... (336,000) Consolidated Balance Sheet: Inventory, December 31, 2016. Other Current Assets ... Investment in Solar Company Land.... 100,000 50,000 136,000 180,000 400,000 50,000 50,000
Paro Solar Statement Accounts Company Company Building and Equipment. Accumulated Depreciation Goodwill ...... Other Intangibles . Current Liabilities . Bonds Payable.. Other Long-Term liabilities. Common Stock Paro Company. Other Paid-In Capitalin Excess of Par-Paro Company . Common Stock-Solar Company . Other Paid-In Capitalin Excess of Par-Solar Company.. Retained Earnings, December 31, 2016 (from above) . 350,000 (100,000) 320,000 (60,000) 20,000 (120,000) (40,000) (100,000) (200,000) (200,000) (100,000) (50,000) (100,000) (250,000) (336,000) ... Totals .
Transcribed Image Text:Paro Solar Statement Accounts Company Company Building and Equipment. Accumulated Depreciation Goodwill ...... Other Intangibles . Current Liabilities . Bonds Payable.. Other Long-Term liabilities. Common Stock Paro Company. Other Paid-In Capitalin Excess of Par-Paro Company . Common Stock-Solar Company . Other Paid-In Capitalin Excess of Par-Solar Company.. Retained Earnings, December 31, 2016 (from above) . 350,000 (100,000) 320,000 (60,000) 20,000 (120,000) (40,000) (100,000) (200,000) (200,000) (100,000) (50,000) (100,000) (250,000) (336,000) ... Totals .
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