Académique Documents
Professionnel Documents
Culture Documents
Differential Calculation
Differential Allocation
Inventory 36,000
Patents 36,000
Total
Sales 480,000
Cost of Peteres - 240,000
Depreciation eExpense - 48,000
Other expenses - 72,000
Net income of Peter Corp. 120,000
Pan Inc.'s ownership of Peter Corp. 100%
Income recognized by Pa 120,000
Less: differential amortization - 43,200
Total income from subsidiary 76,800
Pan =
Beginning 876,000
+Net Income 120,000
-Dividend - 60,000
Ending 936,000
e. Eliminating Entries
Income Statement
Sales 960,000 480,000
Less: COGS - 480,000 - 240,000
Less: Depreciation Expense - 132,000 - 48,000
Less: Other Expenses - 230,400 - 72,000
72,000 Income from Subsidiary 122,400
Impairment Loss
Net Income 240,000 120,000
Balance Sheet
Cash 64,800 44,400
Accounts Receivable 108,000 72,000
Inventory 120,000 96,000
Other Assets 84,000 108,000
Land 60,000 60,000
Building 240,000 180,000
Equipment 600,000 480,000
Investment in Peter Corp. 883,200
Patents
Total Assets 2,160,000 1,040,400
144,000 1,440,000
36,000 133200 - 622,800
- 180,000
- 302,400
72,000 138,000 188,400
7,200 - 7,200
259,200 271,200 523,200
516,000 660,000
259,200 271,200 372,000
60,000 - 120,000
775,200 331,200 912,000
109,200
20,400 159,600
28800 216,000
192,000
120,000
420,000
1,080,000
36,000 936,000 - 52,800
57,600 - 57,600
28,800 28,800
64,800 1,042,800 2,215,200
20,400 228,000
516,000
360,000 720,000
516,000 840,000
896,400 - 2,304,000
Inventory Patents
36,000 36,000
- 36,000 - 7,200
- 28800
Keep on hand
30,000
18,000
Keep on hand
72,000
28,800
ABC --> Parent
XYZ --> Subdisiary -
80%
Required:
a. Eliminating Entries
b. Consilidation workpaper
a. Eliminating Entries
Book value calculations:
NCI 20% ABC 80% = C/S R/E
Original book value 40,000 160,000 100,000 100,000
(+) net income 12,000 48,000 60,000
(-) dividends (3,000) (12,000) (15,000)
Ending book value 49,000 196,000 100,000 145,000
245,000 245,000
R/E Statement
Beg Balance 200,000 100,000 100,000
+ NI 94,400 60,000 78,000 18,000
- Dividen Declared (30,000) (15,000) 15,000
End Balance 264,400 145,000 178,000 33,000
Goodwill
20,000
(8,000)
12,000
Consolidated
385,800
(50,000)
(233,000)
-
102,800
(8,400)
94,400
200,000
94,400
(30,000)
264,400
116,800
105,000
705,000
(370,000)
-
12,000
568,800
45,000
200,000
264,400
59,400
568,800
60,800
60,000
(10,000)
(8,000)
102,800
(8,400)
94,400
Ali -->Parent
Baba --> subdisiary
90%
31/12/20X8
PT Ali PT Baba
Item
Debit Credit Debit Credit
Cash 150,000 100,000
Accounts Receivable 105,500 40,000
Inventory 225,000 125,000
Land 200,000 85,000
Buildings and Equipment 400,000 150,000
Investment in PT Baba 364,500 -
Cost of Goods Sold 250,000 90,000
Depreciation Expense 40,000 15,000
Interest Expense 6,000 5,000
Other Expense 30,000 20,000
Dividends Declared 50,000 30,000
Accumulated Depreciation 200,000 45,000
Accounts Payable 174,000 90,000
Bonds Payable 120,000 50,000
Common Stock 400,500 150,000
Retained Earnings 350,000 100,000
Sales 500,000 225,000
Income from PT Baba 76,500
1,821,000 1,821,000 660,000 660,000
Required:
a. Equity method entries & Eliminating Entries
b. Consilidation workpapaer
Elimination entries
Item PT. Ali PT. Baba Consolidated
Debit Credit
Sales 500,000 225,000 725,000
Income from PT. Baba 76,500 - 85,500 9,000 -
COGS (250,000) (90,000) 5,000 (335,000)
Depretiation Expense (40,000) (15,000) (55,000)
Other Operating Expense (30,000) (20,000) 20,000 (70,000)
Interest Expense (6,000) (5,000) 5,000 (6,000)
ASSET
Cash 150,000 100,000 250,000
Accounts Receivable 105,500 40,000 145,500
Inventory 225,000 125,000 350,000
Land 200,000 85,000 90,000 375,000
Building 400,000 150,000 30,000 520,000
Accumulated Depretiation (200,000) (45,000) 30,000 (215,000)
Investment in PT Baba 364,500 - 283,500
-
-
81,000
Goodwill 20,000 20,000
Total Asset 1,245,000 455,000 120,000 313,500 1,445,500
Goodwill
40,000
(20,000)
20,000
174,000
95,000
5,000
(20,000)
5000
259,000
(8,500)
250,500
364,500
40,500