Answer & Explanation:Complete Problem 2-7 using the Week 02 Excel Template.Using the data given in Problem 2-6, assume that Aron Company purchases 80% of the common stock of Shield Company for $320,000 cash.The following comparative balance sheets are prepared for the two companies immediately after the purchase:Aron Shield Cash$ 315,000$ 40,000Accounts receivable70,00030,000Inventory130,000120,000Investment in Shield Company320,000Land50,00035,000Buildings and equipment350,000230,000Accumulated depreciation(100,000)(50,000)Copyrights 40,000 10,000 Total assets$1,175,000$415,000Current liabilities$ 192,000$ 65,000Bonds payable100,000Common stock ($10 par)Aron100,000Common stock ($5 par)Shield50,000Paid-in capital in excess of par250,00070,000Retained earnings 633,000 130,000 Total liabilities and equity$1,175,000$415,000Required1. Prepare the value analysis and the determination and distribution of excess schedule for the investment in Shield Company.2. Complete a consolidated worksheet for Aron Company and its subsidiary Shield Company as of December 31, 2015.Use the following information for Problems 2-8 through 2-11:In an attempt to expand its operations, Palto Company acquires Saleen Company on January 1, 2015. Palto pays cash in exchange for the common stock of Saleen. On the date of acquisition, Saleen has the following balance sheet:Saleen CompanyBalance SheetJanuary 1, 2015AssetsLiabilities and EquityAccounts receivable$ 20,000Current liabilities$ 40,000Inventory50,000Bonds pay
able100,000Land40,000Common stock ($1 par)10,000Buildings200,000Paid-in capital in excess of par90,000Accumulated depreciation(50,000)Retained earnings60,000Equipment60,000Accumulated depreciation (20,000) Total assets$300,000Total liabilities and equity$300,000An appraisal provides the following fair values for assets:Accounts receivable$ 20,000Inventory60,000Land80,000Buildings320,000Equipment60,000Copyright50,000Information from 2-6On December 31, 2015, Aron Company purchases 100% of the common stock of Shield Company for $450,000 cash. On this date, any excess of cost over book value is attributed to accounts with fair values that differ from book values. These accounts of Shield Company have the following fair values:Cash$ 40,000Accounts receivable30,000Inventory140,000Land45,000Buildings and equipment225,000Copyrights25,000Current liabilities65,000Bonds payable105,000The following comparative balance sheets are prepared for the two companies immediately after the purchase:Aron Shield Cash$ 185,000$ 40,000Accounts receivable70,00030,000Inventory130,000120,000Investment in Shield Company450,000Land50,00035,000Buildings and equipment350,000230,000Accumulated depreciation(100,000)(50,000)Copyrights 40,000 10,000 Total assets$1,175,000$415,000Current liabilities$ 192,000$ 65,000Bonds payable100,000Common stock ($10 par)Aron100,000Common stock ($5 par)Shield50,000Paid-in capital in excess of par250,00070,000Retained earnings 633,000 130,000 Total liabilities and equity$1,175,000$415,000