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a.
(2)
(3)
Dividend income
Minority interest in net assets of subsidiary
Dividends declared Sisa
8,000
2,000
10,000
120,000
30,000
6,000
6,000
b.
Sisa
Company
Adjustments
& Eliminations
Debit
Credit
120,000
Consolidated
320,000
320,000
40,000
180,000
220,000
100,000
( 6,000)
94,000
(1) 8,000
120,000
15,000
75,000
90,000
30,000
(3) 6,000
30,000
230,000
78,000
308,000
40,000
50,000
30,000
80,000
10,000
268,000
70,000
284,000
173,000
500,000
120,000
793,000
105,000
300,000
405,000
278,000
800,000
1,078,000
Accumulated depreciation
Current liabilities
Long-term debt
Common stock
Retained earnings , 12/31
From above
MI in net assets of Subsidiary
175,000
50,000
100,000
200,000
75,000
40,000
120,000
100,000
250,000
90,000
220,000
200,000
268,000
70,000
Total
793,000
Balance Sheet
Current assets
Depreciable assets
Investment in Sisa stock
Total
(2) 50,000
(1) 10,000
(2)120,000
(2)100,000
(1) 2,000
405,000
166,000
(2) 30,000
(3) 6,000
166,000
230,000
94,000
324,000
40,000
284,000
34,000
1,078,000
65
c.
P278,000
P800,000
250,000
550,000
P828,000
P 90,000
220,000
P310,000
P200,000
284,000
34,000
518,000
P828,000
P320,000
P 40,000
180,000
220,000
P100,000
6,000
P 94,000
66
P230,000
94,000
P324,000
40,000
P284,000
Problem 16-8
a.
& Eliminations
Debit
Credit
Palo
Corporation
Sebo
Company
300,000
19,000
319,000
210,000
25,000
23,000
258,000
61,000
150,000
230,000
61,000
291,000
20,000
50,000
20,000
70,000
10,000
271,000
60,000
272,000
Balance Sheet
Cash
Accounts receivable
Inventory
Buildings and equipment
Investment in Sebo stock
37,000
50,000
70,000
300,000
229,000
20,000
30,000
60,000
240,000
57,000
80,000
130,000
540,000
-
Goodwill
Total
686,000
350,000
20,000
827,000
Accumulated depreciation
Accounts payable
105,000
40,000
65,000
20,000
170,000
60,000
Income Statement
Sales
Investment Income
Total revenues
Cost of goods sold
Depreciation expense
Other expenses
Total cost and expenses
Net income carried forward
Retained Earnings
Retained earnings, Jan. 1
Net income from above
Total
Dividends declared
Retained earnings, Dec. 31
carried forward
450,000
450,000
295,000
45,000
48,000
388,000
62,000
(1) 19,000
150,000
85,000
20,000
25,000
130,000
20,000
(2) 50,000
(1) 10,000
(1) 9,000
(2)200,000
(3) 20,000
(3) 20,000
Consolidated
230,000
62,000
292,000
20,000
67
Taxes payable
Common stock
Retained earnings, Dec. 31
from above
Total
b.
70,000
200,000
55,000
150,000
(2)150,000
271,000
686,000
60,000
350,000
239,000
125,000
200,000
239,000
272,000
827,000
P450,000
295,000
155,000
P45,000
48,000
93,000
P 62,000
P230,000
62,000
292,000
20,000
P272,000
P 57,000
80,000
130,000
P540,000
170,000
370,000
20,000
P657,000
68
P 60,000
125,000
200,000
272,000
P657,000
Problem 16-9
1.
Acquisition cost
Less: Book value of interest acquired (80%)
Common stock (P300,000 x 80%)
Retained earnings (P400,000 x 80%)
Difference
Allocation:
Inventories
Land
Building
Equipment
Patents
Total
Minority interest (20%)
Goodwill (not impaired)
P756,000
P240,000
320,000
P( 30,000)
( 50,000)
(100,000)
75,000
( 40,000)
P(145,000)
29,000
560,000
P196,000
(116,000)
P 80,000
(2)
(3)
(4)
Investment income
Minority interest in net assets of subsidiary
Dividends declared S
Investment in S Company
94,800
10,000
50,000
54,800
Common stock S
300,000
Retained earnings, Jan. 1 S
400,000
Investment in S Co.
Minority interest in net assets of subsidiary
560,000
140,000
Inventories
30,000
Land
50,000
Building
100,000
Patents
40,000
Goodwill
80,000
Equipment
Investment in S Company
Minority interest in net assets of subsidiary
75,000
196,000
29,000
30,000
69
Inventory
30,000
2.
7,500
1,500
5,000
4,000
23,700
Income Statement
Sales
Cost of sales
Gross profit
Expenses
Operating income
Investment income
Net /consolidated income
MI interest in net income of
Subsidiary
Net income carried forward
Retained earnings
Retained earnings, 1/1
Net income from above
Total
Dividends declared
Retained earnings, 12/31
Carried forward
Balance Sheet
Cash
Accounts receivable
Inventories
Land
Buildings (net)
Equipment (net)
Patent
Investment in S Co. stock
Goodwill
Total
Adjustments
& Eliminations
Debit
Credit
P
Company
S
Company
1,000,000
400,000
600,000
360,000
240,000
94,800
334,800
500,000
150,000
350,000
200,000
150,000
150,000
334,800
150,000
600,000
334,800
934,800
100,000
400,000
150,000
550,000
50,000
834,800
500,000
834,800
200,000
150,000
100,000
100,000
50,000
40,000
150,000
200,000
450,000
-
300,000
200,000
140,000
200,000
295,000
680,500
36,000
-
298,000
810,800
1,090,000
1,500,000
580,000
920,000
561,500
358,500
358,500
(4) 30,000
(4) 1,500
(1) 94,800
(5) 23,700
(23,700)
334,800
(2)400,000
600,000
334,800
934,800
100,000
(1) 50,000
(3) 30,000
(3) 50,000
(3)100,000
(4) 7,500
(3) 40,000
(3) 80,000
1,558,800
Consolidated
(4) 30,000
(4) 5,000
(3) 75,000
(4) 4,000
(1) 54,800
(2)560,000
(3)196,000
80,000
1,931,500
70
Accounts payable
Common stock
Additional paid-in capital
Retained earnings, 12/31
from above
MI in net assets of subsidiary
Total
124,000
200,000
400,000
190,000
300,000
-
834,800
500,000
(1) 10,000
1,558,800
314,000
200,000
400,000
(2)300,000
1,090,000
466,200
(2)140,000
(3) 29,000
(5) 23,700
466,200
834,800
182,700
1,931,500
Problem 16-10
a.
160,000
160,000
8,000
Dividend income
To record dividends received from Sally (P10,000 x 80%)
b.
8,000
(2)
(3)
(4)
Dividend income
Minority interest in net assets of subsidiary
Dividends declared Sally
P160,000
120,000
40,000
(40,000)
8,000
2,000
10,000
120,000
30,000
40,000
10,000
Depreciation expense
Accumulated depreciation Bldg
5,000
5,000
71
(5)
(6)
c.
Accounts payables
Cash and receivables
10,000
10,000
5,000
Sally Wood
Products
Income Statement
Sales
Dividend income
Total revenue
200,000
8,000
208,000
100,000
120,000
25,000
15,000
160,000
48,000
50,000
15,000
5,000
70,000
30,000
& Eliminations
Debit
Credit
100,000
170,000
45,000
20,000
235,000
65,000
(4) 5,000
(6) 5,000
48,000
30,000
298,000
48,000
346,000
30,000
90,000
30,000
120,000
10,000
316,000
110,000
81,000
260,000
80,000
500,000
160,000
65,000
90,000
80,000
150,000
1,081,000
385,000
205,000
105,000
Consolidated
300,000
300,000
(1) 8,000
Adjustments
(5,000)
60,000
(2) 50,000
(1) 10,000
338,000
60,000
398,000
30,000
368,000
(5) 10,000
(3) 50,000
(2)120,000
(3) 40,000
136,000
350,000
160,000
700,000
1,346,000
(4) 5,000
315,000
72
Accounts payable
Notes payable
Common stock
Retained earnings from above
MI in net assets if subsidiary
Total
60,000
200,000
300,000
316,000
1,081,000
20,000
50,000
100,000
110,000
(5) 10,000
(2)100,000
385,000
(1) 2,000
(2) 30,000
(3) 10,000
(6) 5,000
230,000
230,000
70,000
250,000
300,000
368,000
43,000
1,346,000
Problem 16-11
a.
Eliminating entries:
E(1)
E(2)
E(3)
Dividend Income
Dividends Declared
Eliminate dividend income from subsidiary.
20,000
150,000
50,000
20,000
20,000
220,000
Goodwill
Retained Earnings, January 1
Differential
Assign differential at beginning of year
8,000
12,000
20,000
350,000
20,000
370,000
270,000
25,000
21,000
(316,000)
54,000
Star
Eliminations
Corporation
Company
200,000
200,000
135,000
20,000
10,000
(165,000)
35,000
(1) 20,000
__
20,000
____
Debit
550,000
_______
550,000
405,000
45,000
31,000
(481,000)
69,000
73
Balance Sheet
Cash
Accounts receivable
Inventory
Buildings and equipment
Investment in Star Company
stock
Differential
Goodwill
Debits
Accumulated depreciation
Accounts payable`
Taxes payable
Common stock
Light Corporation
Star Company
Retained earnings, from above
Credits
262,000
60,000
54,000
316,000
(20,000)
35,000
95,000
(20,000)
296,000
75,000
46,000
55,000
75,000
300,000
30,000
40,000
65,000
240,000
___
(1) 20,000
82,000
20,000
260,000
69,000
329,000
(20,000)
309,000
76,000
95,000
140,000
540,000
220,000
-
(2) 50,000
(3) 12,000
20,000
(2)220,000
(2) 20,000 (3) 20,000
(3) 8,000
696,000
375,000
8,000
859,000
130,000
20,000
50,000
85,000
30,000
35,000
215,000
50,000
85,000
200,000
296,000
696,000
200,000
150,000
75,000
375,000
(2)150,000
82,000
260,000
20,000
260,000
309,000
859,000
74
75