Controlling interest in consolidated net income

Payne net income from independent operations

Reported net income from Sierra
Reported net income from Santa Fe
Unrealized profit on sales to Sierra ending inventory
Net income internally generated by Patten
Patten percentage of Sterling income realized from
third parties
Controlling interest in consolidated net income
for 2011

172,000
120,000
292,000
58,000
350,000

280,000

Peat Company and Subsidiary

Consolidated Income Statement
for Year Ended December 31, 2012

Sales
Cost of Sales
Operating Expense
Consolidated Income
Less Noncontrolling Interest in Consolidated Income
Controlling Interest in Consolidated Net Incmoe

Cost of goods
Less intercompany sales
Add unrealized profit in ending inventory
Less realized profit in beginning inventory
cost of goods sold

Reported net income of subsidiary

unrealized profit on subsidiary sales in 2010 that is
considered realized in 2011

12,600,000
7,900,000
1,800,000

9,200,000
(1,400,000)
200,000
(100,000)
7,900,000

2,000,000
75000
2,075,000
207500

9,700,000
2,900,000
207,500
3,107,500

Sales
Purchases (COGS)

425,000

12/31 Inventory ( Income Statement)

12/31 Inventory (Balance Sheet)

410,000

Beginning Retain Earnings-Sterling

Captial Stock -Sterling
Investment in Sterling
NCI Eequity

Noncontrolling interest in consolidated net income

Unrealized profit on upstream sales in ending inventory
Depreciation
Net income reported by Sterling
Realized profit from beginning inventory
subdidiary income included in consolidated income
Noncontrolling ownership percentage interest
Noncontrolling interest in consolidated income

Controlling interest in consolidated net income

Patten net income from independent operations
Unrealized profit on sales to Sterling ending inventory
Net income internally generated by Patten
Patten percentage of Sterling income realized from
third parties
Controlling interest in consolidated net income
for 2011

425,000

410,000
425,000
1,115,000
1,400,000
140,000

20,000
410,000
150,000
580,000
10%
58,000

2,000,000
(96,000)
1,904,000
58,000
1,962,000

Problem 6-13

Punca
Company
Income Statement
Sales
Equity in Segal
Total Revenue
Cost of Goods Sold
Other Expenses
Total Cost and Expense
Net Income
Noncontrolling Interest
Net Income to Retained Earnings
Retained Earnings Statement
Retained Earnings 1/1
Paque Company
Segal Company
Net Income from Above
Dividends Declared
Paque Company
Segal Company
Retained Earnings 12/31
Balance Sheet
Cash
Accounts Receivable
Inventory
Investment in Segal
Other Assets
Total
Accounts Payable
Other Current Liabilities
Common Stock
Paque Company
Segal Company
Retained Earnings
NCI in net assets
Total

Paque Company and Subsidiary

Consolidated Statements Workpaper
For the Year Ended December 31, 2012
Eliminating Entries
Surrano
Company
Dr.

1,650,000
64,125

795,000

1,714,125

795,000

1,290,000
310,500
1,600,500

517,500
206,250
723,750

113,625

71,250

113,625

71,250

838,500
113,625

180,000
71,250

2
1

300,000
64,125

15,000

2
4

379,125

4
5

40,500
180,000
379,125

(150,000)
802,125

(60,000)
191,250

93,000
319,500

75,000
168,750

210,000
847,125

172,500

750,000
2,219,625

630,000
1,046,250

105,000
112,500

45,000
60,000

1
599,625

3
5
1

1,200,000
802,125

750,000
191,250

750,000
599,625
4,500

$2,219,625

$1,046,250

$1,354,125

Paque's Retained Earnings on 12/31/13

Unrealized profit on downstream sales
Unrealized profit on upstream sales
Consolidated retained earnings on 12/31/13

$
$
$
$

802,125.00
(13,500.00)
788,625.00

diary
rkpaper
31, 2012
Eliminating Entries
Cr.

Noncontrolling
Interest

Consolidated
Balance
2,145,000
2,145,000
1,522,500
471,750
1,994,250

300,000
45,000

150,750

345,000

10,125

(10,125)

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
367,500

15,000
837,000
10,125

1,380,000
2,403,750
150,000
172,500
1,200,000
399,000
93,000
$1,354,125

4,125
88,500
92,625

601,500
788,625
92,625

$3,005,250

Entry
Number

Accounts Used

Debit

Equipment

100,000

Loss on sale of equipment

100,000

Accumulated depreciation

Credit

200,000

Entry
Number

Accounts Used

Debit

Credit

Entry
Number

Accounts Used

Debit

Credit

Controlling Interest in Consolidated Income

Unrealized loss on intercompany (downstream)sale

100,000

onsolidated Income
Internally generated income of Pearson
Realization of gain through usage
(depreciation adjustment)
Percentage of sub adjusted income
Controlling interest income

150000
0
90000
240000

Patterson Books
Gain on Sale
Land

A.

Debit
300,000

30,000

Cost Method and Partial Equity Method

Beginning Retained Earnings - Patterson
Noncontrolling Interest
Land

240,000
60,000

Complete Equity Method

Investment in Stevens
Noncontrolling Interest
Land

240,000
60,000

Cost Method and Partial Equity Method

Beginning Retained Earnings - Stevens
Noncontrolling Interest

300,000

Complete Equity Method

Investment in Patterson
Noncontrolling Interest
Land

Credit

300,000

300,000

300,000

300,000
300,000

Entry
Number

Accounts Used

Debit

Credit

Entry
Number

Accounts Used

Debit

Credit

Parsons Company and Subsidiary

Consolidated Statements Workpaper
For the Year Ended December 31, 2013
Eliminating Entries
Punca
Surrano
Company
Company
Dr.
Income Statement
Sales
Dividend Income
Total Revenue
Cost of Goods Sold
Expenses
Total Cost and Expense
Net Income
Noncontrolling Interest
Net Income to Retained Earnings
Retained Earnings Statement
Retained Earnings 1/1
Parsons

Shea
Net Income from Above
Dividends Declared
Parsons
Shea
Retained Earnings 12/31
Balance Sheet
Cash
Accounts Receivable
Inventory
Investment in Shea
Other Current Assets
Difference between implied and book
Land
Property and Equipment
Accumulated Depreciation
Manufacturing formula
Total
Accounts and Notes Payable

2,555,500
54,000

1,120,000

2,609,500

1,120,000

1,730,000

690,500

654,500
2,384,500

251,000
941,500

225,000

178,500

225,000

178,500

375,000
54,000

429,000

595,000

225,000

139,500

139,500
178,500

429,000

(100,000)
720,000

(60,000)
258,000

119,500
342,000
362,000
426,000

132,500
125,000
201,000

40,500

13,000

568,500

71,550

241,000
(53,500) 3

10,500
2,500
2,500

150,000

825,000
(207,000)
2,058,000

659,000

295,000

32,000

Other Liabilities
Capital Stock
Parsons
Shea
Additional Paid-in Capital
Retained Earnings from Above
NCI in assets 1/1

NCI in assets 12/31

Total

43,000

19,000

1,000,000

720,000

300,000
50,000
258,000

300,000
50,000
568,500

2,058,000

659,000

1,005,550

idiary
rkpaper
31, 2013
Eliminating Entries
Cr.

Noncontrolling
Interest

Consolidated
Balance
3,300,500
3,300,500
2,045,500

375,000
18,000

905,500
2,951,000

393,000

30,450

349,500
(30,450)

30,450

319,050

666,550

71,550

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

50,000

160,500
1,068,500
(213,000)
2,351,500
327,000

62,000
1,000,000

464,550

(29,550)

(50,000)
985,600

36,000

(29,550)

(29,550)

905,000

2,295,050

Punca
Company
Income Statement
Sales
Equity in Subsidary income
Total Revenue
Cost of Goods Sold
Other Expenses
Total Cost and Expense
Net Income
Noncontrolling Interest
Net Income to Retained Earnings
Retained Earnings Statement
Retained Earnings 1/1
Prather
Stone
Net Income from Above
Dividends Declared
Prather
Stone
Retained Earnings 12/31
Balance Sheet
Inventory
Investment in Surrano
Fixed assets
Accum Depreication
Total
Liabilities
Common Stock
Prather
Stone
Retained Earnings from Above
Noncontrolling Interest

Total

Prather Company and Subsidiary

Consolidated Statements Workpaper
For the Year Ended December 31, 2012
Eliminating Entries
Surrano
Company
Dr.
Cr.

1,950,000
240,000

1,350,000

2,190,000

1,350,000

1,350,000

900,000

225,000
1,575,000

150,000
1,050,000

615,000

300,000

615,000

300,000

240,000

1,505,400
615,000

1,038,000
300,000

15,000

240,000

15,000

120,000
1,038,000

12,000

240,000

15,000

(150,000)
1,970,400

(75,000)
1,263,000

498,000
1,430,400

225,000

2,168,100

2,625,000

(900,000)
3,196,500

(612,000)
2,238,000

465,600

450,000

60,000
1,398,000

87,000

1,250,400
180,000
390,000
30,000

540,000

760,500
1,970,400

525,000
1,263,000

525,000
1,398,000
30,000

3,196,500

2,238,000

2,373,000

87,000
312,600
3,000
2,373,000

Prather Retained Earnings on 12/31/13

Unrealized profit on downstream sales
Unrealized profit on upstream sales
Consolidated retained earnings on 12/31/13

$
$

1,505,400
-

1,505,400

Noncontrolling
Interest

Consolidated
Balance
3,300,000
3,300,000
2,250,000
360,000
2,610,000

63,000

690,000
(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
285,600

1,874,400

333,600

333,600

3,884,100