Prepare all eliminations and adjustments that would be made

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Reference no: EM13950368

Sophisticated equity method, second year, eliminations, income statement. The trial balances of Pepper and Sultan companies of Exercise 5 for December 31, 20X2, are presented as follows:

	Pepper	Sultan
Current Assets	152,000	115,000
Depreciable Fixed Assets	400,000	200,000
Accumulated Depreciation	(130,000)	(40,000)
Investment in Sultan Company	260,000
Current Liabilities	(80,000)
Common Stock ($10 par)	(300,000)	(100,000)
Retained Earnings, January 1, 20X2	(255,000)	(170,000)
Sales	(200,000)	(100,000)
Expenses	160,000	85,000
Subsidiary Income (from Sultan Company)	(7,000)
Dividends Declared		10,000
Totals	0	0

Pepper Company continues to use the sophisticated equity method.

1. Prepare all the eliminations and adjustments that would be made on the 20X2 consolidated worksheet.

2. Prepare the 20X2 consolidated income statement and its related income distribution schedules.

Reference no: EM13950368

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