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    Solution P4-4 Advanced Accounting

    Uploaded by

    Ayu Cintya Dewi
    The document provides financial statements for Pal Corporation and its 75% owned subsidiary Sun Corporation for the year ended December 31, 2011, including income statements, retained earnings statements, and balance sheets. It also includes a consolidation workpaper that eliminates reciprocal accounts between Pal and Sun and calculates the noncontrolling interest for the 25% of Sun not owned by Pal. The workpaper consolidates the financial results of the two companies and presents the information needed to prepare a consolidated financial statement for Pal Corporation and its subsidiary.

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    Solution P4-4 Advanced Accounting

    Uploaded by

    Ayu Cintya Dewi
    5K views4 pages
    The document provides financial statements for Pal Corporation and its 75% owned subsidiary Sun Corporation for the year ended December 31, 2011, including income statements, retained earnings statements, and balance sheets. It also includes a consolidation workpaper that eliminates reciprocal accounts between Pal and Sun and calculates the noncontrolling interest for the 25% of Sun not owned by Pal. The workpaper consolidates the financial results of the two companies and presents the information needed to prepare a consolidated financial statement for Pal Corporation and its subsidiary.

    Original Description:

    Solution P4-4 Advanced Accounting Chapter 4 - Beams

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    The document provides financial statements for Pal Corporation and its 75% owned subsidiary Sun Corporation for the year ended December 31, 2011, including income statements, retained earnings statements, and balance sheets. It also includes a consolidation workpaper that eliminates reciprocal accounts between Pal and Sun and calculates the noncontrolling interest for the 25% of Sun not owned by Pal. The workpaper consolidates the financial results of the two companies and presents the information needed to prepare a consolidated financial statement for Pal Corporation and its subsidiary.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    5K views4 pages

    Solution P4-4 Advanced Accounting

    Uploaded by

    Ayu Cintya Dewi
    The document provides financial statements for Pal Corporation and its 75% owned subsidiary Sun Corporation for the year ended December 31, 2011, including income statements, retained earnings statements, and balance sheets. It also includes a consolidation workpaper that eliminates reciprocal accounts between Pal and Sun and calculates the noncontrolling interest for the 25% of Sun not owned by Pal. The workpaper consolidates the financial results of the two companies and presents the information needed to prepare a consolidated financial statement for Pal Corporation and its subsidiary.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
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    The document provides financial statements for Pal Corporation and its subsidiary Sun Corporation for the year ended December 31, 2011. It also includes a consolidation workpaper to consolidate the financial statements of the parent and subsidiary.

    The consolidation workpaper is prepared to eliminate reciprocal accounts and transactions between the parent and subsidiary and present the financial position and performance of the consolidated entity.

    Adjustments made in the consolidation workpaper include eliminating the investment in subsidiary and reciprocal accounts, establishing beginning noncontrolling interest, allocating excess purchase price to goodwill, and entering the noncontrolling interest share of income and dividends.

    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

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