Question

Price Company purchased 90% of the outstanding common stock of Score Company on January 1, 2011, for $450,450. At that time, Score Company had stockholders’ equity consisting of common stock, $202,200; other contributed capital, $162,200; and retained earnings, $91,300. On December 31, 2015, trial balances for Price Company and Score Company were as follows:

		Price		Score
Cash		$107,300		$79,300
Accounts Receivable		162,800		95,200
Note Receivable		74,600		—0—
Inventory		303,900		158,600
Investment in Score Company		450,450		—0—
Plant and Equipment		927,600		428,200
Land		161,100		70,900
Dividends Declared		69,800		50,300
Cost of Goods Sold		818,400		245,800
Other Expenses		248,200		121,900
Total Debits		$3,324,150		$1,250,200
Accounts Payable		$129,800		$45,100
Notes Payable		294,400		117,600
Common Stock		499,500		202,200
Other Contributed Capital		264,200		162,200
Retained Earnings, 1/1		683,400		208,800
Sales		1,400,120		514,300
Dividend and Interest Income		52,730		—0—
Total Credits		$3,324,150		$1,250,200

Price Company’s note receivable is receivable from Score Company. Interest of $7,460 was paid by Score to Price during 2015. Any difference between book value and the value implied by the purchase price relates to goodwill.

Prepare a consolidated statements workpaper on December 31, 2015. (List items that increase retained earnings first.)

Answer 1