The Primary Company and the VIE Company had the

balance #6288
The Primary Company and the VIE Company had the balance sheet shown in Problem SA2-1
above on the date control was achieved. The Primary Company guaranteed the 5% bond
payable issued by the VIE Company. The Primary Company also loaned the VIE Company
$300,000 on a subordinated note at 10% annual interest.The fair value of the VIE Company's
assets (without deduction for debt) is $870,000. Equipment, with a 5 year life is $50,000 greater
than book value.The VIE company will pay 10% annual interest to the Primary Company on the
intercompany loan. The VIE will also pay a fee of 5% on its sales revenue to the Primary
Company.The Primary Company and the VIE Company had the following trail balances on
December 31, 2016:Continue to the next page..1. Prepare a determination and distribution of
excess schedule for the schedule. (If problem SA12-1 was completed, the same schedule
applies).2. Prepare a consolidate worksheet for the Primary and VIE Companies as of
December 31, 2016. Include the income distribution schedules?View Solution:
The Primary Company and the VIE Company had the balance

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