Problem

Consolidated balance sheet workpapers (excess allocated to equipment and goodwill)Pan Corp...

Consolidated balance sheet workpapers (excess allocated to equipment and goodwill)

Pan Corporation purchased 90 percent of Son Corporation’s outstanding stock for $7,200,000 cash on January 1, 2011, when Son’s stockholders’ equity consisted of $4,000,000 capital stock and $1,400,000 retained earnings. The excess was allocated $1,600,000 to undervalued equipment with an eight-year remaining useful life and $1,000,000 to goodwill. Son’s net income and dividends for 2011 were $1,000,000 and $400,000, respectively. Comparative balance sheet data for Pan and Son Corporations at December 31, 2011, are as follows (in thousands):

REQUIRED: Prepare consolidated balance sheet workpapers for Pan Corporation and Subsidiary on December 31, 2011.

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Solutions For Problems in Chapter 3