P3-2 (in thousands)

1. Investment in Set $350

Fair value of Set ($350/70%) 500
Book value of Set (200+20) (220)
Total excess of fair value over book value $280

Allocation to identifiable assets and liabilities:

Fair Value Book Value Excess Allocated

Inventories $ 100 $ 60 $40

Land $ 120 $100 $20

Buildings $ 180 $140 $40

Equipment $ 60 $80 ($20)

Notes Payable $ 80 $100 $20

Total allocated to identifiable net assets $100

Goodwill $180
Total excess of fair value over book value $280

2.

Unamortized excess 280

Capital stock 200
Retained earnings-Set 20
 Investment in Set 350
Non controlling interest (30% x 500) 150

Adjustments and
70% Consolidated
Par eliminations
Set Balance sheet
debits credits
Assets
Cash 70 40 110
Recevaibles-net 160 60 220
Inventories 140 60 40 240
Land 200 100 20 320
Buildings-net 220 140 40 400
Equipment-net 160 80 20 220
Investment in Set 350 350
Goodwill 180 180
Unamortized excess 280 280
TOTAL ASSETS 1690
Liabilities & Equity
Account payable 180 160 340
Other liabilities 20 100 20 100
Capital stock, $20 par 1000 200 200 1000
Retained earnings 100 20 20 100
Noncontrolling interest 150 150
TOTAL LIABILITIES &
1690
EQUITY
 Par Corporation and Subsidiary
Consolidated Balance Sheet
at January 1, 2011

Assets
Current assets:
Cash ($70 + $40) $110
Receivables net ($160 + $60) 220
Inventories ($140 + $60 + $40) 240 $ 570

Property, plant and equipment:

Land ($200 + $100 + $20) $320
Buildings net ($220 + $140 + $40) 400
Equipment net ($160 + $80 - $20) 220 940
Goodwill (from consolidation) 180
Total assets $1,690

Liabilities and Equity

Liabilities:
Accounts payable ($180 + $160) $ 340
Other liabilities ($20 + $100 - $20) 100 $ 440

Equity:
Capital stock $1,000
Retained earnings 100
Noncontrolling interest 150 1,250
Total liabilities and stockholders equity $1,690
 P3-6 (in thousands)
Original investment $ 900
Add: 90% of Sims $40 net income 36
Deduct: 90% of Sims $20 dividends (18)
Investment in Sim $918

Fair value of Sim ($918/90%) 1020

Book value of Sim (600+220) (880)
Total excess $140

a. Capital stock-Sim 600

Retained earnings-Sim 220
Goodwill 200
Investment in Sim 918
Noncontrolling interest (10% x 1020) 102

b. Divineds payable 18
Dividends recevaible 18
(90% x 20)

Per Corporationand Subsidiary

Consolidated Balance Sheet Workpapers
After Combination on December 31, 2011
(in thousands)

Adjustments and
Consolidated
Per Sim eliminations
Balance sheet
Debits Credits
Assets
Cash 84 40 124
Recevaibles-net 100 260 b 18 342
Inventories 700 100 800
Land 300 400 700
Equipment-net 1200 200 1400
Investment in Sim 918 a 918
Goodwill a 200 200
TOTAL ASSETS 3302 1000 3566
Liabilitien & Equity
Accounts payable 820 160 980
Dividend payable 120 20 b 18 112
Capital stock 2000 600 a 600 2000
Retained earnings 362 220 a 220 362
Noncontrolling interest a 102 102
TOTAL LIABITIES &
3302 1000 3566
EQUITY