Question: Refer to the preceding information for Paulcraft’
Refer to the preceding information for Paulcraft’s acquisition of Switzer’s common stock. Assume that Paulcraft pays $420,000 for 70% of Switzer common stock. Paulcraft uses the cost method to account for its investment in Switzer. Paulcraft and Switzer have the following trial balances on December 31, 2017: 
Required 1. Prepare a value analysis and a determination and distribution of excess schedule for the investment in Switzer. 2. Complete a consolidated worksheet for Paulcraft Corporation and its subsidiary Switzer Corporation as of December 31, 2017. Prepare supporting amortization and income distribution schedules. 
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Paulcraft Switzer Cash 157,000 90,000 120,000 100,000 420,000 800,000 110,000 55,000 86,000 60,000 Accounts Receivable Inventory Land.. Investment in Switzer. Buildings Accumulated Depreciation Equipment .... Accumulated Depreciation Current Liabilities.. Bonds Payable. 250,000 (220,000) 150,000 (80,000) 100,000 (90,000) (60,000) (72,000) (102,000) (100,000) (10,000) (90,000) (182,000) (350,000) 210,000 15,000 14,000 68,000 8,000 Common Stock (100,000) (900,000) (315,000) (800,000) 450,000 30,000 15,000 140,000 Paid-In Capital in Excess of Par Retained Earnings, January 1, 2017. Sales Cost of Goods Sold Depreciation Expense Buildings. Depreciation Expense-Equipment. Other Expenses . Interest Expense. Dividend Income (7,000) 20,000 Dividends Declared. 10,000 Totals Use the following information for Problems 3-14 through 3-18: Fast Cool Company and Fast Air Company are both manufacturers of air conditioning equipment. On January 1, 2015, Fast Cool acquires the common stock of Fast Air by exchanging its own $1 par, $20 fair value common stock. On the date of acquisition, Fast Air has the following balance sheet: Fast Air Company balance sheet January 1, 2015 Assets Liabilities and Equity $ 40,000 Current liabilities . 60,000 Mortgage payable 50,000 Common stock ($1 par).. 400,000 Paid-in capital in excess of par (50,000) Retained earnings . 150,000 $ 30,000 200,000 100,000 200,000 180,000 Accounts receivable Inventory Land. Buildings Accumulated depreciation Equipment . Accumulated depreciation Patent (net). (30,000) 40,000 Goodwill . 50,000 Total assets. $710,000 Total liabilities and equity $710,000 (continued) Fast Cool requests that an appraisal be done to determine whether the book value of Fast Air's net assets reflect their fair values. The appraiser determines that several intangi- ble assets exist, although they are unrecorded. If the intangible assets do not have an observable market, the appraiser estimates their value. The appraiser determines the fol- lowing fair values and estimates: Accounts receivable $ 40,000 Inventory (sold during 2015). Land.. 65,000 100,000 500,000 100,000 50,000 30,000 205,000 10,000 Buildings (20-year life) Equipment (5-year life). Patent (5-year life) . Current liabilities . Mortgage payable (5-year life) . Favorable purchase contract (2-year life) Any remaining excess is attributed to goodwill.
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