#1 Pan Corporation & Sun Company

Consolidated Balance Sheet

as of December 31, 2016

Assets:
Cash: $ 200,000
Accounts Recievables: $ 296,000
Inventories: $ 769,000
Equipment: $ 2,220,000
Total Assets: $ 3,512,000

Liabilities and
Stockholder's Equity
Accounts Payable: $ 272,000
Common Stock, $20 par: $ 1,840,000
Retained Earnings: $ 1,200,000
Noncontrolling interest: $ 200,000
Total Liabilities and
Stockholder's Equity: $ 3,512,000

#2 Consolidated Net Income For 2017

Pam Corporation Seperrate Income: $ 680,000

Income From Sun Company: $ 360,000
Consolidated Net Income: $ 1,040,000
Noncontrolled Interest: $ (72,000)
Controlling Interest: $ 968,000
 Calculations:

Cash = 128,000 + 72,000

Acct Rec = 180,000 + 136,000 - 20,000
Inventories = 572,000 + 224,000
Equipment = 1,520,000 + 700,000

Acct Pay = 160,000 + 132,000 - 20,000

Noncontrolled Int = 600,000 + 400,000 = 1,000,000 x 20%

Consolidated Net Income = 680,000 + 360,000

Noncontrolled Interest = 360,000 x 20%
#1 Schedule to Allocate Fair Value/Book Value differential

Cost of Investment in Son Company: $ 350,000

Implied Fair Value of Son Company: $ 500,000
Book Value of Son Company: $ (220,000)
Excess Fair Value over Book Value: $ 280,000

Inventories: $ 40,000
Land: $ 20,000
Building: $ 40,000
Equipment: $ (20,000)
Other Liabilities: $ 20,000
Allocated to Identifiable Net Assets: $ 100,000
Goodwill: $ 180,000
Excess Fair Value over Book Value: $ 280,000

#2 Pop Corporation & Son Company

Consolidated Balance Sheet
As of January 1, 2016

Assets:
Current Assets:
Cash: $ 110,000
Accounts Recievable: $ 220,000
Inventories: $ 240,000 $ 570,000
Property/Plant Assets:
Land: $ 320,000
Building: $ 400,000
Equipment: $ 220,000 $ 940,000
Goodwill: $ 180,000
Total Assets $ 1,690,000

Liabilites and
Stockholder's Equity:
Liabilites:
Accounts Payable: $ 340,000
Other Liabilities: $ 100,000 $ 440,000
Stockholder's Equity:
Capital Stock, $20 par: $ 1,000,000
Retained Earnings: $ 100,000
Equity of Controlling
Interests: $ 1,100,000
Noncontorlling Interests: $ 150,000 $ 1,250,000
Total Liabilites and
Stockholder's Equity: $ 1,690,000
 Calculations:

Implied Fair Value of Son = 350,000 / 70%

Book Value of Son = 200,000 + 20,000
Excess Fair Value over Book Value = 500,000 - 220,000

Inventories = 100,000 - 60,000

Land = 120,000 -100,000
Building = 180,000 - 140,000
Equipment = 60,000 - 80,000
Other Lia = 80,000 - 100,000

Cash = 70,000 + 40,000

Acct Rec = 160,000 + 60,000
Inventories = 140,000 + 60,000 + 40,000

Land = 200,000 + 100,000 + 20,000

Building = 220,000 + 140,000 + 40,000
Equipment = 160,000 + 80,000 - 20,000

Acct Pay = 180,000 + 160,000

Other Lia = 20,000 + 100,000 - 20,000
Noncontrolling = 350,000 / 70% = 500,000 x 30%