comparative adjusted trial balances for ply corporation and ski 244753

Comparative adjusted trial balances for Ply Corporation and Ski Corporation are given here. Ply Corporation acquired an 80 percent interest in Ski Corporation on January 1, 2011, for $80,000 cash. Except for inventory items that were undervalued by $1,000 and equipment that was undervalued by $4,000, all of Ski’s identifiable assets and liabilities were stated at their fair values on December 31, 2010. The remaining excess was assigned to previously-unrecorded intangibles, which had a 40-year remaining life. Ski Corporation sold the undervalued inventory items during 2011 but continues to own the equipment, which had a four-year remaining useful life as of December 31, 2010. (All amounts are in thousands.)

REQUIRED: Prepare consolidation workpapers for Ply Corporation and Subsidiary for 2011 and 2012 using the financial statement approach. ( Hint: Ply Corporation’s accountant applied the equity method correctly for 2011 but misapplied the equity method for2012.)

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