Sam Corporation purchased 80 percent of James Corporation's outstandig stock for $

7.500.000 cash on July 15, 2020, when James' stockholders' equity consisted of $ 3.400.000
capital stock and $ 2.600.000 retained earnings. There has different between book value and
fair value in James' Corporation, $1.800.000 to undervalued equipment with an eight-year
remaining useful life (Book Value $ 2.700.000, Fair Value $ 4.500.000), equal for else.
Comparative balance sheet data for Sam and James Corporation at July 15, 2020, are follows
:

Sam (Book) James (Book)

Cash $ 1.800.000 $ 1.500.000
Inventories 1.000.000 3.000.000
Other current assets 1.500.000 2.800.000
Equipment-net 2.700.000 2.700.000
Investment in James 7.500.000
Total asset 14.500.000 10.000.000

Account payable 3.500.000 2.000.000

Other Liabilities 1.200.000 1.000.000
Capital Stock 8.000.000 3.400.000
Retained Earnings 1.800.000 2.600.000
Total Liabilities and Equity 14.500.000 9.000.000

Required : Prepared journal elimination and adjustment on July 15, 2020 and consolidated
balance sheet workpapers for Sam Corporation and Subsidiary on July 15, 2020
Investment in James Corporation's (80%) $ 7.500.000
Total equity James Corporation's (100%) $ 9.375.000
Book value of interest acquired $ 7.000.000
Excess of cost over BV $ 2.375.000

Sam Corporation journal

Investment In James $ 7.500.000
Cash $ 7.500.000

Capital Stock $ 3.400.000

Retained Earnings $ 3.600.000
Goodwill $ 2.375.000
Investment in James $ 7.500.000
Minority interest $ 1.875.000
Balance sheet

Adjustment and Consolidated

Account Eliminations Balance
Sam James Debit Credit Sheet
Cash $ 1.080.000 $ 1.500.000 $ 3.300.000
Inventories $ 1.000.000 $ 3.000.000 $ 4.000.000
Other Current Assets $ 1.500.000 $ 2.800.000 $ 4.300.000
Equipment - net $ 2.700.000 $ 2.700.000 $ 5.400.000
Investment In James $ 7.500.000 $ 7.500.000
$
Goodwill $ 2.375.000
2.375.000
Total Asset $ 14.500.000 $ 10.000.000 $ 19.375.000

Adjustment and Consolidated

Account Eliminations Balance
Sam James Debit Credit Sheet
Account Payable $ 3.500.000 $ 2.000.000 $ 5.500.000
Other Liabilities $ 1.200.000 $ 1.000.000 $ 2.200.000
$
Capital Stock $ 8.000.000 $ 3.400.000 $ 8.000.000
3.400.000
$
Retained Earnings $ 1.800.000 $ 3.600.000 $ 1.800.000
3.600.000
Minority Interest $ 1.875.000 $ 1.875.000
Total Liabilities and
$ 14.500.000 $ 10.000.000 $ 19.375.000
Equity