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Refer to the preceding information for Pcraft?s ac...

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Refer to the preceding information for Pcraft?s acquisition of Sailair?s common stock. As-sume that Pcraft paid $500,000 for 100% of Sailair common stock. Pcraft uses the cost methodto account for its investment in Sailair. Pcraft and Sailair had the following trial balances on De-cember 31, 20X3: PcraftSailairCash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80,00060,000Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90,00055,000Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120,00086,000Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100,00060,000Investment in Sailair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .500,000Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .800,000300,000Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(220,000)(80,000)Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .150,000100,000Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(90,000)(72,000)Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(60,000)(102,000)Bonds Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(100,000)Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(100,000)(10,000)Paid-In Capital in Excess of Par . . . . . . . . . . . . . . . . . . . . . . . . . . . .(900,000)(90,000)Retained Earnings, Jan. 1, 20X3 . . . . . . . . . . . . . . . . . . . . . . . . . . .(315,000)(182,000)Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(800,000)(350,000)Cost of Goods Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .450,000210,000Depreciation Expense?Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . .30,00015,000Depreciation Expense?Equipment . . . . . . . . . . . . . . . . . . . . . . . . . .15,00014,000Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .140,00068,000Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8,000Dividend Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(10,000)Dividends Declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20,00010,000Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .00 1.Prepare a zone analysis and a determination and distribution of excess schedule for the in-vestment in Sailair.2.Complete a consolidated worksheet for Pcraft Corporation and its subsidiary Sailair Corpo-ration as of December 31, 20X3. Prepare supporting amortization and income distribution schedules There is a cheat sheet attached with three tabs that need to be used for the answers.,There is nothing done on the answer sheets. They are exactly the same.

 

Paper#4577 | Written in 18-Jul-2015

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