Anggota Kelompok

1. Ayu Cintya Dewi (04)

2. Regina Anjani El-Shadday Putri (19)

P 4-4
Consolidation Workpapers from separate financial statements
Pal Corporation acquired a 75 percent interest in Sun Corporation on January 1, 2011, for $720.000 in cash.
Financial statements of Pal and Sun Corporation for 2011 are as follows (in thousand dollars)
Pal Sun
Combined Income and Retained Earnings
Statement for the Year Ended December 31
Sales 1600 400
Income from Sun 72 -
Cost of Sales (1000) (200)
Other Expense (388) (104)
Net Income 284 96
Add : Retained earnings January 1 720 136
Deduct : Dividends (200) (64)
Retained earnings December 31 804 168

Balance Sheet at December 31

Cash 236 60
Account receivable - net 320 80
Dividends receivable from Sun 24 -
Inventories 380 40
Note Receivable - 20
Land 260 120
Building-net 680 320
Equipment-net 520 200
Investment in Sun 744 -
Total Assets 3164 840

Accounts payable 340 40

Note payable to Sun 20 -
Dividends payable - 32
Capital stock, $10 par 2000 600
Retained earnings 804 168
Total Equities 3164 840

REQUIRED :
Prepare consolidation workpaper for Pal Corporation and Subsidiary for the year ended
December 31, 2011. Only the information provided in the financial statement is available, according
your solution will rquire some standard assumptions
Capital Stock 600
Retained Earnings 168
Book Value at December 31, 2011 768
Net Income 2011 (96)
Dividends 2011 64
Book Value at January 1, 2011 736

Purchase Price 720

Fair Value of Sun ($720.000 / 75%) 960
Book Value of Sun 736
Excess (allocated to Goodwill) 224

PAL CORPORATION AND SUBSIDIARY

GENERAL JOURNAL
DECEMBER, 2011
(IN THOUSANDS)
Date Account Name and Description Debit Credit
2011
1) Dec. 31 Capital Stock 600
Retained Earnings 136
Goodwill 224
Investment in Sun 720
Noncontrolling Interest (25% x $960.000) 240
(to eliminate reciprocal equity and investment balances,
establish beginning noncontrolling interest, and enter goodwill)

2) Dec. 31 Income from Sun (75% x $96.000) 72

Dividends (75% x $64.0000) 48
Investment in Sun 24
(to eliminate income and dividends from Sun and return
the investment account to its beginning of the period balance)

3) Dec. 31 Noncontrolling Interest Share 24

Dividends (25% x $64.000) 16
Noncontrolling Interest 8
(to enter noncontrolling interest share of subsidiary income and dividends)

4) Dec. 31 Note Payable to Sun 20

Note Receivable 20
(To eliminate reciprocal receivable and payable balances)

5) Dec. 31 Dividend Payable 24

Dividends receivable from Sun 24
(To eliminate reciprocal receivable and payable balances)

Amount 1,100 1,100

 PAL CORPORATION AND SUBSIDIARY CONSOLIDATION WORKPAPER
FOR THE YEAR ENDED DECEMBER 31, 2011
(IN THOUSANDS)
Adjustments and Consolidated
Pal 75% Sun Eliminations Statement
Debit Credit
Income Statement
Sales 1600 400 2000
Income from Sun 72 2) 72 0
Cost of sales (1000) (200) (1200)
Other expenses (388) (104) (492)
Noncontrolling share 3) 24 (24)
Controlling share of net income 284 96 284

Retained Earnings Statement

Retained earnings - Pal 720 720
Retained earnings - Sun 136 1) 136 0
Controlling share of net income 284 96 284
Dividends (200) (64) 2) 48 (200)
3) 16
Retained earnings - Dec 31 804 168 804

Balance Sheet
Cash 236 60 296
Accounts receivable 320 80 400
Dividends receivable from Sun 24 5) 24 0
Inventories 380 40 420
Note receivable 20 4) 20 0
Land 260 120 380
Buildings - net 680 320 1000
Equipment - net 520 200 720
Investment in Sun 744 1) 720 0
2) 24
Goodwill 1) 224 224
3164 840 3440

Accounts payable 340 40 380

Note payable to Sun 20 4) 20 0
Dividends payable 32 5) 24 8
Capital stock, $10 par 2000 600 1) 600 2000
Retained earnings 804 168 804
3164 840

Noncontrolling interest Jan. 1 1) 240

Noncontrolling interest Dec. 31 3) 8 248

1100 1100 3440

Capital Stock 600

Retained Earnings 168
Goodwill 224
 992
Noncontrolling interest Dec. 31 (25% x $992.000) 248