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PROBLEM $4-4$

Consolidated Workpaper, Partially Owned Subsidiary, Cost Method LO $5$

Place Company purchased $92\%$ of the common stock of Shaw, Inc. on January $1,2022,$ for $$400,000.$ Trial balances at the end of $2022$ for the companies were:

Place

Shaw

Cash $$80,350$ $$87,000$

Accounts and Notes Receivable $200,000210,000$

Inventory, $1/170,00050,000$

Investment in Shaw, Inc. $400,0000$

Plant Assets $300,000200,000$

Dividends Declared $35,00022,000$

Purchases $240,000150,000$

Selling Expenses $28,00020,000$

Other Expenses $15,00013,000$

$$1,368,350$ $$752,000$

Accounts and Notes Payable $$99,110$ $$38,000$

Other Liabilities $45,00015,000$

Common Stock, $$10$ par $150,000100,000$

Other Contributed Capital $279,000149,000$

Retained Earnings, $1/1225,000170,000$

Sales $550,000280,000$

Dividend Income $20,240$

$0$

$$1,368,350$ $$752,000$

Inventory balances on December $31,2022,$ were $$25,000$ for Place and $$15,000$ for Shaw, Inc. Shaw's accounts and notes payable contain a $$15,000$ note payable to Place.

Required:

Prepare a workpaper for the preparation of consolidated financial statements on December $31,2022.$ The difference between book value of equity acquired and the value implied by the purchase price relates to subsidiary land, which is included in plant assets.

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