Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng

Exercise 15

100% bargain, complicated equity method, second year. Refer to the preceding information for Fast Cool's acquisition of Fast Air's common stock. Assume Fast Cool issues 25,000 shares of its $20 fair value common stock for 100% of Fast Air's common stock. Fast Cool uses the simple equity method to account for its investment in Fast Air. Fast Cool and Fast Air have the following trial balances on December 31, 2012, shown on page 196.
1. Prepare a value analysis and a determination and distribution of excess schedule for the investment in Fast Air.
2. Complete a consolidated worksheet for Fast Cool Company and its subsidiary Fast Air Company as of December 31, 2012. Prepare supporting amortization and income distribution schedules.