Reference no: EM133059494

Question - The separate trial balance Thanos SA and Merry SA, its 90% owned subsidiary, for the year ended 2014 is as follows:

Debits	Thanos SA	Merry SA
Cash	$700	$600
Accounts receivable	1,000	400
Interest receivable	0	25
Inventory	1,100	700
Land	1,900	800
Equipment-net	1,100	1,400
Building-net	2,000	1,400
Investment in Thanos SA bonds	0	460
Investment in Merry SA	3,600	0
Cost of sales	2,800	2,400
Interest expense	100	0
Other expenses	1,100	700
Dividends	300	100
Total	$15,700	$8,985
Credits	Thanos SA	Merry SA
Accounts payable	$1,300	$1,000
Interest payable	50	0
10% bonds payable	1,000	0
Common stock	5,000	2,000
Retained Earnings	3,380	2,085
Sales	4,800	3,700
Gain on sale of land	0	200
Gain on sale of equipment	100	0
Interest income	70	0
Total	$15,700	$8,985

ADDITIONAL INFORMATION -

1. Thanos SA acquired Merry SA when the book value of its net identifiable assets equaled the fair value.

2. Intercompany merchandise sale during 2014 by Thanos SA to Merry SA was $800,000 while unrealized profit of $100,000 remained in the ending inventory.

3. Thanos SA purchased land from Merry SA with book value of $800,000 for $1,000,000 in 2014. Thanos SA holds the land until 2015.

4. Merry SA purchased equipment from Thanos SA for $700,000 on December 31, 2014. The gain from selling this equipment was $100,000.

5. On January 1, 2014, Merry SA purchased half of Thanos SA's 10 percent outstanding bonds that were originally issued at par for $440,000. The bonds will mature on January 1, 2017. The bonds paid interest every January 1 and July 1.

Required - Prepare journals and consolidation workpapers for Thanos SA and subsidiary for the year ended December 31, 2014.