Cost method, 90%, straight-line bonds. On January 1, 2015, Parker Company acquired 90% of the common stock of Stride Company for $351,000. On this date, Stride had common stock, other paid-in capital in excess of par, and retained earnings of $100,000, $40,000, and $210,000, respectively. The excess of cost over book value is due to goodwill. In both 2015 and 2016, Parker accounted for the investment in Stride using the cost method.
On January 1, 2015, Stride sold $100,000 par value of 10-year, 8% bonds for $94,000. The bonds pay interest semiannually on January 1 and July 1 of each year. On December 31, 2015, Parker purchased all of Stride’s bonds for $98,200. The bonds are still held on December 31, 2016. Both companies correctly recorded all entries relative to bonds and interest, using straight-line amortization for premium or discount.
The trial balances of Parker Company and its subsidiary were as follows on December 31, 2016:
Prepare the worksheet necessary to produce the consolidated financial statements of Parker and its subsidiary Stride for the year ended December 31, 2016. Round all computations to the nearest dollar.