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On January 1, 2014, Plate Company purchased a 90% interest in
the common stock of Set Company for $650,000, an amount $20,000
in excess of the book value of equity acquired. The excess relates to
the understatement of Set Company's land holdings.
Excerpts from the consolidated retained earnings section of the
consolidated statements workpaper for the year ended December 31,
2014, follow:
Set Company
Consolidated Balances
1/1/14 retained earnings
190,000
880,000
Net income from above
132,000
420,000
Dividends declared
(50,000)
(88,000)
12/31/14 retained earnings to the balance sheet
272,000