Worksheet, 100% account adjustment except goodwill. Drew Corporation purchased 80% of the outstanding stock of Winters Company for $240,000 on January 1, 20X1. Winters Company had the following stockholders’ equity:

Common stock ($5 par)	$150,000
Retained earning   Â	50,000
Total equity     Â	$200,000

The fair values of Winters’ assets and liabilities agreed with the book values, except for the equipment and the building. The equipment was undervalued by $10,000 and was thought to have a 5-year life; the building was undervalued by $50,000 and was thought to have a 20-year life. Drew Corporation uses the simple equity method to record its investments.

Since the purchase date, both companies have operated separately and no intercompany transactions have occurred.

The separate trial balances of the companies on December 31, 20X2, are as follows:

Â	Drew Corp	Winters Co
Cash                     Â	319,600	110,000
Land                     Â	160,000	90,000
Buildings                   Â	225,000	135,000
Accumulated Depreciation—Building Â	(100,000)	(50,000)
Equipment                   Â	450,000	150,000
Accumulated Depreciation—Equipment	(115,000)	(60,000)
Investment in Winters Co           Â	260,000	Â
Liabilities                     Â	(480,000)	(150,000)
Common Stock ($100 par)         Â	(400,000)	Â
Common Stock ($5 par)           Â	Â	(150,000)
Paid-In Capital in Excess of Par       Â	(40,000)	Â
Retained Earnings 1/1/X2         Â	(251,600)	(65,000)
Sales                       Â	(460,000)	(120,000)
Cost of Goods Sold               Â	220,000	60,000
Other Expenses                 Â	210,000	50,000
Subsidiary Income               Â	(8,000)	Â
Dividends Declared               Â	10,000	Â
Total                       Â	0	0

Using the Economic Unit Concept—Goodwill Only on the Controlling Interest, complete the following:

1. Prepare a determination and distribution of excess schedule for the investment.

2. Prepare the 20X2 consolidated worksheet. Include columns for the eliminations and adjustments, the consolidated income statement, the noncontrolling interest, the controlling retained earnings, and the consolidated balance sheet. Prepare supporting income distribution schedules as well.

3. Prepare the 20X2 consolidated statements, including the income statement, retained earnings statement, and balance sheet.