KUIS ADVANCE ACCOUNTING I & II 1. Angel Corporation acquired 80% interest in Devil Corporation on January 1, 2007 for $ 800.

000, at which time Devil had capital stock $ 850.000 and retained earning $ 125.000. Any excess cost over book value was allocated to goodwill. Financial statements for Angel and Devil Corp for the year ended December 31, 2011 are as follow (in thousands) :

Additional information: a. Angel Corp uses the equity method in accounting for its investment in Devil Corp. b. Sales of inventory from Angel to Devil during 2010 were totaled $ 75.000 and during 2011 were $130.000. Unrealized profit in Devil's inventories consist of merchandise purchased from Angel were $24.500 on December 31, 2010 and $38.000 on December 31, 2011. c. All inter company balances have been paid except for $34.000 in transit from Angel to Devil at December 31, 2011. d. Devil sold equipment with an eight-year remaining useful life to Angel on Jan 2, 2008 at a gain $ 64.000. The equipment is still in use by Angel. e. Angel sold land to Devil on August 16, 2011. The land was sold at a gain of $ 36.000. Angel also have sold building whose cost $145.000 to Devil for $175.000 on July 1, 2009 which had remaining useful life of 10 years. f. Devil purchased $ 150.000 par of Angel's 10% bonds in the open market for $ 165.000 on July 1, 2011. Interest is paid semiannually on July 1 and Jan 1, and the bonds mature on July 1, 2016. Bonds originally issued at par. Instruction: a. Compute the amount allocated as goodwill! b. Prepare computational supporting schedules for amounts of income from Devil 2011, noncontrolling interest share 2011, and investment in Devil Dec 31, 2011 and noncontrolling interest Dec 31, 2011!

c. Prepare adjustment and elimination journal entries for consolidating financial statements of Angel and Devil for the
year ended Dec 31, 2011! d. Prepare the consolidation working papers for the Angel and Devil for the year ended Dec 31, 2011!