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1. Pawl Corporation acquired 90% of Snab Corporation on January 1, 2014 for $72,000 cash when Snab's stockholders' equity consisted of $30,000 of Capital Stock and $30,000 of Retained Earnings. The difference between the fair value of Pawl's assets and liabilities and the book value was allocated to a plant asset with a remaining 10-year straight-line life that was overvalued on the books by $5,000. The remainder was attributable to goodwill. The separate company statements for Pawl and Snab appear in the first two columns of the partially completed consolidation working papers.

Required:

Complete the consolidation working papers for Pawl and Snab for the year 2014.

Eliminations Debit Credit Consol- idated Pawl Snab INCOME STATEMENT sales s 60.000 $22.000 Income of Snab 3,510 ( 13.000) 9.500) (2.000) 3,000) Cost of Sales Depreciation Expense Other Expense Noncontrolling Interest Share ( 23.000 6.100) $ 25,510 $ 3.400 S 25,000 $30,000 25,510 3,400 Net income Retained Earnings 1/1 Add: Net Anche Less: Dividends Retained Earnings 12/31 BALANCE SHEET Cash Accounts Receivable-net 15,000) (3,000) $ 35,510 $30,400 S 26.520 $ 7.000 22.000 10.000 Inventories 20,000 14.000 27.000 42.000 Land Equipment and Buildings.net Investment in Snab COIRONation Goodwill 70,000 38,000 72.810 TOTAL ASSETS $ 238,330 5111,000 LIAB. 6 EQUITY Accounts payable s 32,820 $50, 600 Capital Stock 170.000 30.000 Retained Earnings 35,510 30, 400 Noncontrolling Interest TOTAL LIAB. $ EQUITY 238,330 $ 111,000

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