Zigma purchased 100% of Standard for $450K on January 1st 2XX1.The information below is from the December 31, 2XX1 accounts. Atthe time of purchase all FMV of all assets and liabilities equalbook value, except for the following Description Book Value FairValue Building $100,000 $175,000 10 Year Life Inventory 10,00020,000 2 month life Land 5,000 50,000 Any excess from the purchaseprice will be allocated to goodwill. Requirement: Prepare theappropriate elimination journal entries and complete the worksheetZigma Standard Income Statement Sales 200,000 470,000 OtherExpenses (90,000) (67,000) Depreciation (30,000) (20,000) Incomefrom Standard 365,500 Net Income 445,500 383,000 Statement ofRetained Earnings Beginning RE 175,000 150,000 Net Income 445,500383,000 Less Dividends Declared (32,000) (30,000) Ending RetainedEarnings 588,500 503,000 Balance Sheet Current Assets 143,000285,000 Depreicable Assets 200,000 473,000 Accumulated Depreciation(120,000) (105,000) Investment in Standard 785,500 Land 105,0005,000 Goodwill Total Assets 1,113,500 658,000 Current Liabilities50,000 55,000 Long Term Liabilities 375,000 50,000 Common Stock100,000 50,000 Retained Earnings 588,500 503,000 - - TotalLiabilities and Equity 1,113,500 658,000
