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Consolidated working papers




Consolidated working papers (downstream sales);Pan Corporation acquired 100% of Sal Corporation's oustanding votiong common stock on Jan 1, 2009, for $660,000 cash. Sal's stockholders' equity on this date consisted on $300,000 capital stock and $300,000 retained earnings. The difference between the price paid by Pan Corporation and the underlying equity aquired in Sal Corporation was allocated $30,000 to Sal's undervalued inventory and the remainder to goodwill(which is not amortized). The undervalued inventory items were sold by Sal during 2009.;Pan made sales of $100,000 to Sal at a gross profit of $40,000 during 2009, during 2010, Pan made sales of $120,000 to Sal at a gross profit of $48,000. One-half the 2009 sales were invetoried by Sal at year-end 2009, and one-fourth of the 2010 sales were inventoried by Sal at year-end 2010. Sal owed Pan $17,000 on account at December 21, 2010.;The separate financial statements of Pan and Sal Corporations at and for the year ended December 31, 2010, are summarized as follows;Combined Income and Retained Earning Statements;for the year ended December 31, 2010 (in thousands);Sales;Pan:$800 Sal:$400;Income from Sal;Pan: $108 Sal:$-;Cost of Sales;Pan:$(400) Sal: $(200);Depreciation Expense;Pan: $(110) Sal: $(40);Other Expenses;Pan: $(192) Sal: $(60);Net Income;Pan: $206 Sal: $100;Beginning Retained Earnings;Pan: $606 Sal: $380;Less: Dividends;Pan: $(100) Sal: $(50);Retained Earnings December 31, 2010;Pan: $712 Sal: $430;Balance Sheet at December 31, 2010;Cash;Pan: $54 Sal: $37;Receivables-net;Pan: $90 Sal: $60;Inventories;Pan: $100 Sal: $80;Other Assets;Pan: $70 Sal: $90;Land;Pan: $50 Sal: $50;Buildings-net;Pan: $200 Sal: $150;Equipment-net;Pan: $500 Sal: $400;Investment in Sal;Pan: $748 Sal: $-;Total assets;Pan: $1,812 Sal: $867;Account Payable;Pan: $160 Sal: $47;Other Liabilities;Pan: $340 Sal: $90;Common Stock, $10 par;Pan: $600 Sal: $300;Retained Earnings;Pan: $712 Sal: $430;Total Equities;Pan: $1,812 Sal: $867;Requiered: Prepare working papers to consolidate the financial statements of Pan Corporation and Subsidiary at and for the year ended December 31, 2010


Paper#25858 | Written in 18-Jul-2015

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