Pullman, Inc. acquired a controlling interest in Sierra Company on 1/1/20×1. At that time, the book value of Sierra Company’s net assets was $16,970,000, including the following:

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On 1/1/20x1, Petwoud Concourse presumed 100% of the $1 par compute unappropriated voting low accumulation of Supagud, Inc. for a coin acquittal of $600,000. At the compensation bound, the unspotted compute of Petwoud Company’s low accumulation was $20 per divide.  Adown is the epitome counteract subterfuge instruction of Supagud, Inc. at compensation (1/1/20x1):

                                                                           Debit      Credit

Accounts payable                                                          60,000

Accounts receivable                                     50,000

Additional hired-in high                                              60,000

Buildings (net) (20-year condition)                      140,000

Cash and short-term investments             70,000

Common accumulation                                                              300,000

Equipment (net) (8-year condition)                     240,000

Intangible goods (vague condition)             110,000

Land                                                              90,000

Long-term liabilities (confirmed 12/31/x3)                   180,000

Retained hues, 1/1/x1                                          120,000

Supplies                                                        20,000

Totals                                                           720,000     720,000

Book compute of net equity                           480,000

During fiscal year-ending 12/31/20x1 and 12/31/20x2, Supagud, Inc. generated net proceeds and hired dividends as follows:

                            Net proceeds  Dividends

20x1                     $104,000     $13,000

20x2                     $142,000     $30,000

As of 1/1/20x1, Supagud's place had a unspotted compute of $102,000, its buildings were computed at $188,000, and its equipment was appraised at $216,000.  According to Petwoud Company’s dissection, they procure annals any redundancy of remuneration hired aggravate unspotted compute of goods and liabilities presumed as a Patent asset to be amortized aggravate 6 years.

Required

A.      Using the compensation rule and showy that Petwoud dissolves Supagud, Inc. so it is no longer in trade, provide Petwoud Company’s life annals to annals the compensation of Supagud, Inc. at 1/1/20x1.

For B. and C. adown, presume Supagud offal in trade as a disjoined easy concourse and that, for interior accounting purposes, Petwoud accounts for their investment in Supagud, Inc. using the equity rule:

B.       Provide Petwoud Company’s life annals to annals the compensation of Supagud, Inc. at 1/1/20x1.

C.       Provide Petwoud Company’s worksubterfuge confederation life entries for:

                     i.            December 31, 20x1 and

                   ii.            December 31, 20x2.


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