Pecan Incorporated Acquired 80% of the Voting Stock of Shew

question 34

Essay

Pecan Incorporated acquired 80% of the voting stock of Shew Manufacturing for $800,000 on January 2, 2014 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 2014, Shew borrowed $80,000 on a short-term non-interest-bearing note from Pecan, and on December 31, 2014, Shew mailed a check for $20,000 to Pecan in partial payment of the note. Pecan deposited the check on January 4, 2015, and recorded the entry to reduce the note balance at that time.
Required:
Complete the consolidation working papers for the year ended December 31, 2014.

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Definitions:

Neurotransmitter

Chemical substances in the brain that transmit signals from one neuron to another, playing key roles in mood, cognition, and behavior.

Emotional Intensity

The magnitude of emotional reactions to events or situations.

Basic Emotions

Fundamental feelings that exist across cultures, often considered to include happiness, sadness, disgust, fear, surprise, and anger.

Physiological Arousal

The bodily responses to stimuli or activities that increase heart rate, respiration, and energy levels, often associated with stress, excitement, or physical exertion.