Price Company purchased 90% of the outstanding common stock of
Score Company on January 1, 2016, for $450,000. At that time, Score
Company had stockholders' equity consisting of common stock,
$200,000; other contributed capital, $160,000; and retained
earnings, $90,000. On December 31, 2020, trial balances for Price
Company and Score Company were as follows:
Price
Score
Cash
$ 109,000
$ 78,000
Accounts Receivable
166,000
94,000
Note Receivable
75,000
—0—
Inventory
309,000
158,000
Investment in Score Company
450,000
—0—
Plant and Equipment
940,000
420,000
Land
160,000
70,000
Dividends Declared
70,000
50,000
Cost of Goods Sold
822,000
242,000
Operating Expenses
250,500
124,000
Total Debits
$3,351,500
$1,236,000
Accounts Payable
$ 132,000
$ 46,000
Notes Payable
300,000
120,000
Common Stock
500,000
200,000
Other Contributed Capital
260,000
160,000
Retained Earnings, 1/1
687,000
210,000
Sales
1,420,000
500,000
Dividend and Interest Income
52,500
—0—
Total Credits
$3,351,500
$1,236,000
Price Company's note receivable is receivable from Score
Company. Interest of $7,500 was paid by Score to Price during 2020.
Any difference between book value and the value implied by the
purchase price relates to goodwill.
Required:
Prepare a consolidated statements workpaper on December 31,
2020.