Pullman, Inc. acquired a controlling interest in Sierra Company on 1/1/20×1. At that time, the book value of Sierra Company’s net assets was $16,970,000, including the following:


On 1/1/20x1, Petwoud Society uncongenial 100% of the $1 par estimate ungathered voting vulgar hoard of Supagud, Inc. for a money cancelment of $600,000. At the compensation epoch, the honorable estimate of Petwoud Company’s vulgar hoard was $20 per portion-out.  Under is the abstract weigh equivocation notification of Supagud, Inc. at compensation (1/1/20x1):

                                                                           Debit      Credit

Accounts payable                                                          60,000

Accounts receivable                                     50,000

Additional remunerated-in consummate                                              60,000

Buildings (net) (20-year condition)                      140,000

Cash and short-term cannonades             70,000

Common hoard                                                              300,000

Equipment (net) (8-year condition)                     240,000

Intangible proceeds (loose condition)             110,000

Land                                                              90,000

Long-term liabilities (grown 12/31/x3)                   180,000

Retained hues, 1/1/x1                                          120,000

Supplies                                                        20,000

Totals                                                           720,000     720,000

Book estimate of net equity                           480,000

During fiscal year-ending 12/31/20x1 and 12/31/20x2, Supagud, Inc. generated net allowance and remunerated dividends as follows:

                            Net allowance  Dividends

20x1                     $104,000     $13,000

20x2                     $142,000     $30,000

As of 1/1/20x1, Supagud's plant had a honorable estimate of $102,000, its buildings were estimated at $188,000, and its equipment was appraised at $216,000.  According to Petwoud Company’s dissection, they accomplish annals any redundancy of remuneration remunerated balance honorable estimate of proceeds and liabilities uncongenial as a Patent asset to be amortized balance 6 years.

Required

A.      Using the compensation manner and lofty that Petwoud dissolves Supagud, Inc. so it is no longer in affair, provide Petwoud Company’s register proceedings to annals the compensation of Supagud, Inc. at 1/1/20x1.

For B. and C. under, arrogate Supagud trash in affair as a disconnected uncounted society and that, for interior accounting purposes, Petwoud accounts for their cannonade in Supagud, Inc. using the equity manner:

B.       Provide Petwoud Company’s register proceedings to annals the compensation of Supagud, Inc. at 1/1/20x1.

C.       Provide Petwoud Company’s workequivocation confederation register entries for:

                     i.            December 31, 20x1 and

                   ii.            December 31, 20x2.