Prepare the consolidated income distribution schedules

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Reference no: EM13950326

Cost method, second year, eliminations, income state- ment. The trial balances of Pepper and Sultan companies of Exercise 7 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	250,000
Current Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(80,000)
Common Stock ($10 par) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(300,000)	(100,000)
Retained Earnings, January 1, 20X2. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(244,000)	(170,000)
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(200,000)	(100,000)
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	160,000	85,000
Dividend Income (from Sultan Company) . . . . . . . . . . . . . . . . . . . . . . . . .	(8,000)
Dividends Declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		10,000
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	0	0

Pepper Company continues to use the cost 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: EM13950326

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