Chapter 6 & 7 Homework

7/28/2019 Chapter 6 & 7 Homework

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Controlling interest in consolidated net income

Payne net income from independent operations

Reported net income from Sierra 172,000

Reported net income from Santa Fe 120,000

Unrealized profit on sales to Sierra ending inventory

Net income internally generated by Patten 292,000

Patten percentage of Sterling income realized fromthird parties 58,000


for 2011 350,000


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280,000


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Sales 12,600,000Cost of Sales 7,900,000

Operating Expense 1,800,000 9,700,000

Consolidated Income 2,900,000

Less Noncontrolling Interest in Consolidated Income 207,500

Controlling Interest in Consolidated Net Incmoe 3,107,500

Cost of goods 9,200,000

Less intercompany sales (1,400,000)Add unrealized profit in ending inventory 200,000

Less realized profit in beginning inventory (100,000)

cost of goods sold 7,900,000

Reported net income of subsidiary 2,000,000

unrealized profit on subsidiary sales in 2010 that is

considered realized in 2011 75000

2,075,000

207500

Peat Company and Subsidiary

Consolidated Income Statement

for Year Ended December 31, 2012


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5/25

Sales 425,000

Purchases (COGS) 425,000

12/31 Inventory ( Income Statement) 410,000

12/31 Inventory (Balance Sheet) 410,000

Beginning Retain Earnings-Sterling 425,000Captial Stock -Sterling 1,115,000

Investment in Sterling 1,400,000

NCI Eequity 140,000

Noncontrolling interest in consolidated net income

Unrealized profit on upstream sales in ending inventory

Depreciation 20,000

Net income reported by Sterling 410,000

Realized profit from beginning inventory 150,000

subdidiary income included in consolidated income 580,000

Noncontrolling ownership percentage interest 10%

Noncontrolling interest in consolidated income 58,000


Patten net income from independent operations 2,000,000

Unrealized profit on sales to Sterling ending inventory (96,000)

Net income internally generated by Patten 1,904,000

Patten percentage of Sterling income realized from

third parties 58,000Controlling interest in consolidated net income

for 2011 1,962,000


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Problem 6-13

Punca

Company

Surrano

Company Dr.Income Statement

Sales 1,650,000 795,000 2 300,000

Equity in Segal 64,125 1 64,125

Total Revenue 1,714,125 795,000

Cost of Goods Sold 1,290,000 517,500 3 15,000 2

Other Expenses 310,500 206,250 4

Total Cost and Expense 1,600,500 723,750

Net Income 113,625 71,250

Noncontrolling Interest

Net Income to Retained Earnings 113,625 71,250 379,125

Retained Earnings Statement

Retained Earnings 1/1

Paque Company 838,500 4 40,500

Segal Company 180,000 5 180,000

Net Income from Above 113,625 71,250 379,125

Dividends Declared

Paque Company (150,000)

Segal Company (60,000) 1

Retained Earnings 12/31 802,125 191,250 599,625

Balance Sheet

Cash 93,000 75,000

Accounts Receivable 319,500 168,750

Inventory 210,000 172,500 3

Investment in Segal 847,125 5

1

Other Assets 750,000 630,000

Total 2,219,625 1,046,250

Accounts Payable 105,000 45,000

Other Current Liabilities 112,500 60,000

Common Stock

Paque Company 1,200,000

Segal Company 750,000 750,000

Retained Earnings 802,125 191,250 599,625

NCI in net assets 4,500

Total $2,219,625 $1,046,250 $1,354,125

Paque Company and Subsidiary

Consolidated Statements Workpaper

For the Year Ended December 31, 2012

Eliminating


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Paque's Retained Earnings on 12/31/13 802,125.00$

Unrealized profit on downstream sales -$

Unrealized profit on upstream sales (13,500.00)$

Consolidated retained earnings on 12/31/13 788,625.00$


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Cr.

Noncontrolling

Interest

Consolidated

Balance

2,145,000

2,145,000

300,000 1,522,500

45,000 471,750

1,994,250

150,750

10,125 (10,125)

345,000 10,125 140,625

798,000

345,000 10,125 140,625

(150,000)

54,000 (6,000)

399,000 4,125 788,625

168,000

488,250

15,000 367,500

837,000

10,125

1,380,000

2,403,750

150,000

172,500

1,200,000

399,000 4,125 601,500

93,000 88,500 788,625

92,625 92,625

$1,354,125 $3,005,250

Entries


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Entry

Number Accounts Used Debit Credit

Equipment 100,000

Loss on sale of equipment 100,000

Accumulated depreciation 200,000


10/25

Entry



11/25

Entry



12/25

Unrealized loss on intercompany (downstream)sale 100,000

Controlling Interest in Consolidate


13/25


14/25


15/25

Internally generated income of Pearson 150000

Realization of gain through usage

(depreciation adjustment) 0

Percentage of sub adjusted income 90000

Controlling interest income 240000

d Income


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Patterson Books Debit Credit

Gain on Sale 300,000

Land 30,000

A. Cost Method and Partial Equity Method

Beginning Retained Earnings - Patterson 240,000

Noncontrolling Interest 60,000

Land 300,000

Complete Equity Method

Investment in Stevens 240,000


Land 300,000

B Cost Method and Partial Equity Method

Beginning Retained Earnings - Stevens 300,000


Complete Equity Method

Investment in Patterson 300,000


Land


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Entry



18/25

Entry



19/25

Punca

Company

Surrano

Company Dr.Income Statement

Sales 2,555,500 1,120,000 375,000

Dividend Income 54,000 54,000

Total Revenue 2,609,500 1,120,000

Cost of Goods Sold 1,730,000 690,500

Expenses 654,500 251,000

Total Cost and Expense 2,384,500 941,500

Net Income 225,000 178,500


Net Income to Retained Earnings 225,000 178,500 429,000



Parsons 595,000 1

Shea 139,500 139,500

Net Income from Above 225,000 178,500 429,000

Dividends Declared

Parsons -

Shea (100,000) (60,000)

Retained Earnings 12/31 720,000 258,000 568,500

Balance Sheet

Cash 119,500 132,500

Accounts Receivable 342,000 125,000

Inventory 362,000 201,000

Investment in Shea 426,000 1 71,550

Other Current Assets 40,500 13,000

Difference between implied and book

Land 150,000 10,500

Property and Equipment 825,000 241,000 2,500

Accumulated Depreciation (207,000) (53,500) 3 2,500 2

Manufacturing formula

Total 2,058,000 659,000

Accounts and Notes Payable 295,000 32,000

Parsons Company and Subsidiary



Eliminatin


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Other Liabilities 43,000 19,000

Capital Stock

Parsons 1,000,000

Shea 300,000 300,000

Additional Paid-in Capital 50,000 50,000

Retained Earnings from Above 720,000 258,000 568,500

NCI in assets 1/1

NCI in assets 12/31

Total 2,058,000 659,000 1,005,550


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Cr.

Noncontrolling

Interest

Consolidated

Balance

3,300,500

3,300,500

375,000 2,045,500

18,000

905,500

2,951,000

349,500

30,450 (30,450)

393,000 30,450 319,050

71,550 666,550

393,000 30,450 319,050

(60,000)

464,550 (29,550) 985,600

252,000

467,000

563,000

324,000

30,450

53,500

160,500

1,068,500

50,000 (213,000)

2,351,500

327,000

Entries


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62,000

1,000,000

(50,000)

464,550 (29,550) 985,600

36,000 (29,550) (29,550)

905,000 2,295,050


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Punca

Company

Surrano

Company Dr. Cr.Income Statement

Sales 1,950,000 1,350,000

Equity in Subsidary income 240,000 240,000

Total Revenue 2,190,000 1,350,000

Cost of Goods Sold 1,350,000 900,000

Other Expenses 225,000 150,000 15,000

Total Cost and Expense 1,575,000 1,050,000

Net Income 615,000 300,000


Net Income to Retained Earnings 615,000 300,000 240,000 15,000



Prather 1,505,400 120,000 12,000

Stone 1,038,000 1,038,000

Net Income from Above 615,000 300,000 240,000 15,000

Dividends Declared

Prather (150,000)

Stone (75,000) 60,000

Retained Earnings 12/31 1,970,400 1,263,000 1,398,000 87,000

Balance Sheet

Inventory 498,000 225,000

Investment in Surrano 1,430,400 1,250,400

180,000

Fixed assets 2,168,100 2,625,000 390,000

Accum Depreication (900,000) (612,000) 30,000 540,000

Total 3,196,500 2,238,000

Liabilities 465,600 450,000

Common Stock

Prather 760,500

Stone 525,000 525,000

Retained Earnings from Above 1,970,400 1,263,000 1,398,000 87,000

Noncontrolling Interest 30,000 312,600

3,000

Total 3,196,500 2,238,000 2,373,000 2,373,000

Prather Company and Subsidiary



Eliminating Entries


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Prather Retained Earnings on 12/31/13 1,505,400$

Unrealized profit on downstream sales -$

Unrealized profit on upstream sales

Consolidated retained earnings on 12/31/13 1,505,400$


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Noncontrolling

Interest

Consolidated

Balance

3,300,000

3,300,000

2,250,000

360,000

2,610,000

690,000

63,000 (63,000)

63,000 627,000

1,397,400

63,000 627,000

(150,000)

(15,000)

48,000 1,874,400

723,000

180,000

5,183,100

(2,022,000)

4,064,100

915,600

760,500

48,000 1,874,400

285,600

333,600 333,600

3,884,100

Documents

Chapter 6 & 7 Homework