80% purchase, bargain, several adjustments, worksheet. Use the preceding information for Purnell's purchase of Sentinel common stock. Assume Purnell exchanges 10,000 shares of its own stock for 80% of the common stock of Sentinel. The stock has a market value of $50 per share and a par value of $1. Purnell has the following trial balance immediately after the purchase:
| Purnell Corporation Trial Balance December 31, 20X1 |
|
Cash
|
20,000
|
|
Accounts Receivable
|
300,000
|
|
Inventory
|
410,000
|
|
Investment in Sentinel
|
500,000
|
|
Land
|
800,000
|
|
Buildings
|
2,800,000
|
|
Accumulated Depreciation
|
(500,000)
|
|
Equipment
|
600,000
|
|
Accumulated Depreciation
|
(230,000)
|
|
Current Liabilities
|
(150,000)
|
|
Bonds Payable
|
(300,000)
|
|
Common Stock ($1 par)
|
(83,000)
|
|
Paid-In Capital in Excess of Par
|
(3,067,000)
|
|
Retained Earnings
|
(1,100,000)
|
|
Total
|
0
|
Required
1. Prepare the value analysis schedule and the determination and distribution of excess schedule for the investment in Sentinel.
2. Complete a consolidated worksheet for Purnell Corporation and its subsidiary Sentinel Corporation as of December 31, 20X1.