13 separate income statements of plantation corporation and its 90 owned subsidiary 4307615

13) Separate income statements of Plantation Corporation and its 90%-owned subsidiary, Savannah Corporation, for 2011 are as follows, prior to Plantation recording any income related to its subsidiary:

PlantationSavannah

Sales Revenue$870,000 $230,000

Gain on equipment35,000

Gain on land20,000

Cost of sales(470,000)(90,000)

Other expenses(265,000)(60,000)

Separate incomes$170,000 $100,000

Additional information:

1.Plantation acquired its 90% interest in Savannah Corporation when the book values were equal to the fair values.

2.The gain on equipment relates to equipment with a book value of $95,000 and a 7-year remaining useful life that Plantation sold to Savannah for $130,000 on January 1, 2011. The straight-line depreciation method was used and the equipment has no salvage value.

3.On January 1, 2011, Savannah sold land to an outside entity for $90,000.  The land was acquired from Plantation in 2009 for $70,000. The original cost of the land to Plantation was $45,000.

4.Savannah did not declare or distribute dividends in 2011.

Required:

1.Prepare elimination/adjusting entries on the consolidated worksheet for the year 2011.

2.Prepare the consolidated income statement for the year ended December 31, 2011.