Pecan Incorporated Acquired 80% of the Voting Stock of Shew

question 17

Essay

Pecan Incorporated acquired 80% of the voting stock of Shew Manufacturing for $800,000 on January 2,2011 when Shew had outstanding common stock of $600,000 and Retained Earnings of $300,000.The book value and fair value of Shew's assets and liabilities were equal except for equipment.The entire fair value/book value differential is allocated to equipment and is fully depreciated on a straight-line basis over a 5-year period.
During 2011,Shew borrowed $80,000 on a short-term non-interest-bearing note from Pecan,and on December 31,2011,Shew mailed a check for $20,000 to Pecan in partial payment of the note.Pecan deposited the check on January 4,2012,and recorded the entry to reduce the note balance at that time.
Required:
Complete the consolidation working papers for the year ended December 31,2011.

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Definitions:

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Informal, culturally specific beliefs and understandings about the world, often passed down through generations and not necessarily based on scientific evidence.

Everyday Variables

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A type of intelligence defined and measured by four branches (one’s ability to perceive emotion, utilize emotions to facilitate thought, understand emotion, and manage emotion).

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Myers-Briggs Type Indicator, a personality inventory that categorizes individuals into 16 distinct personality types based on preferences in how they perceive the world and make decisions.