100%, equity, ending inventory. On January 1, 2015, 100% of the outstanding stock of Solo Company was purchased by Plato Corporation for $3,300,000. At that time, the book value of Solo’s net assets equaled $3,000,000. The excess was attributable to equipment with a 10-year life.
The following trial balances of Plato Corporation and Solo Company were prepared on December 31, 2015:
Throughout 2015, sales to Plato Corporation made up 30% of Solo’s revenue and produced a 25% gross profit rate. At year-end, Plato Corporation had sold $250,000 of the goods purchased from Solo Company and still owed Solo $30,000. None of the Solo products were in Plato’s January 1, 2015, beginning inventory.
Prepare the worksheet necessary to produce the consolidated income statement and balance sheet of Plato Corporation and its subsidiary for the year ended December 31, 2015. Include the determination and distribution of excess schedule.