Question

Problem 11-3 (LO 3, 5) Translate a trial balance and prepare a consolidation worksheet with excess of cost over book value traceable to equipment. Due to increasing pressures to expand globally, Pueblo Corporation acquired a 100% interest in Soren- son Company, a foreign company, on January 1, 2016. Pueblo paid 12,000,000 FC, and Soren- son's equity consisted of the following: Common stock... Paid-in capital in excess of par ........ Retained earnings .......... Total......................................... 3,000,000 FC 2,000,000 4,200,000 9,200,000 FC On the date of acquisition, equipment with a 10-year life was undervalued by 500,000 FC. Any remaining excess of cost over book value is attributable to additional equipment with a 20-year life. The trial balances for Pueblo and Sorenson as of December 31, 2018, are as follows: Pueblo Corporation Sorenson Company Cash ............ 4,050,000 2,840,000 FC Accounts Receivable .......... 5,270,000 3,990,000 Inventory ............... 5,540,000 5,800,000 Investment in Sorenson ......... 20,969,000 Fixed Assets ................. 21,000,000 15,000,000 Accumulated Depreciation .... (12,560,000) (6,800,000) Accounts Payable (3,450,000) (1,580,000) Long-Term Debt (10,000,000) (5,000,000) Common Stock (4,000,000) 13,000,000) Paid In Capital in Excess of Par ....... 16,500,000) 12,000,000) Retained Earnings, January 1, 2018.... (12,180,000) 17,950,000)

Answer 1

As per the given question,

Answer
	Consolidate Worksheet December, 31, 2018
	Cash		7,770,400
	Accounts Receivable		10,576,700
	Inventory		13,254,000
	Fixed Assets		34,884,300
	Accumulated Depreciation		(21,604,000)
	Account Payable		(5,551,400)
	Long Term debt		(16,650,000)
	Common Stock		(4,000,000)
	Paid in capital in excess of Par		(6,500,000)
	Retained Earning		(12,180,000)
	Sales		(39,300,000)
	Cost of Goods Sold		26,355,000
	Operating Expenses		4,806,000
	Subsidiary Income		(2,299,570)

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