On January 1, 2014, Parkway, Inc., issued securities with a total fair value of $450,000 for 100

percent of Skyline Corporation’s outstanding ownership shares. Skyline has long supplied

inventory to Parkway, which hopes to achieve synergies with production scheduling and product

development with this combination.
Although Skyline’s book value at the acquisition date was $300,000, the fair value of

its trademarks was assessed to be $30,000 more than their carrying amounts. Additionally,
Skyline’s patented technology was undervalued in its accounting records by $120,000. The

trademarks were considered to have indefinite lives, and the estimated remaining life of the

patented technology was eight years.
In 2014, Skyline sold Parkway inventory costing $30,000 for $50,000. As of December 31, 2014, Parkway had resold only 28 percent of this inventory. In 2015, Parkway bought from
Skyline $80,000 of inventory that had an original cost of $40,000. At the end of 2015, Parkway

held $28,000 of inventory acquired from Skyline, all from its 2015 purchases.
During 2015, Parkway sold Skyline a parcel of land for $95,000 and recorded a gain of

$18,000 on the sale. Skyline still owes Parkway $65,000 related to the land sale.
At the end of 2015, Parkway and Skyline prepared the following statements in preparation

for consolidation.
a. Show how Parkway computed its $55,400 equity in Skyline’s earnings balance.
b. Prepare a 2015 consolidated worksheet for Parkway and Skyline.
Parkway,