Prepare the consolidated income statement

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Reference no: EM132464124

Problem - Equity method, second year, eliminations, income statement

The trial balances of Parker and Sargent companies for December 31, 2016, are presented as follows:

 

Parker

Sargent

Current Assets

102,000

115,000

Depreciable Fixed Assets

400,000

200,000

Accumulated Depreciation

(130,000)

(40,000)

Investment in Sargent Company

320,000

 

Current Liabilities

(80,000)

 

Common Stock ($ 10 par)

(300,000)

(100,000)

 

 

Parker

Sargent

Retained Earnings, January 1, 2016

(260,000)

(170,000)

Sales

(200,000)

(100,000)

Expenses

160,000

85,000

Subsidiary Income

(12,000)

 

Dividends Declared

 

10,000

Totals

0

0

Parker Company continues to use the simple equity method.

1. Prepare all the eliminations and adjustments that would be made on the 2016 consolidated worksheet.

2. Prepare the 2016 consolidated income statement and its related income distribution schedules.

Reference no: EM132464124

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