PLASTIK CORPORATION AND SUBSIDIARY

Consolidated Financial Statement Workpapers

December 31, 2011
Plastik

90% Sol

Adjustment and
Eliminations
Debt

Income Statement:
Sales
Income from Sol
Gain on equipment
Cost of sales
Depreciation expenses
Other expenses
Noncontrolling interest share
Controlling share of net income
Retained Earning Statements:
Retained earning - Plastik
Retained earning - Sol
Add: controlling share of N/I
Less: dividends
Retained earnings - Dec. 31
Balance Sheet:
Cash
Accounts receivable - net
Dividends receivable
Inventories
Other current assets
Land
Building - net
Equipment - net
Investment in Sol

Goodwill
Unarmotized excess
Total assets
Accounts payable
Dividends payable
Other liabilities
Capital Stock, $10 par
Retained earnings
Total liabilies and equities
Noncontrolling interest Jan. 1
Noncontrolling interest Dec. 31

200,000.00
18,000.00

110,000.00

80,000.00
40,000.00
25,500.00

40,000.00
20,000.00
10,000.00

72,500.00

40,000.00

18,000.00
10,000.00
4,000.00
8,000.00

75,000.00
72,500.00
40,000.00

50,000.00
40,000.00
20,000.00

107,500.00

70,000.00

29,500.00
28,000.00
8,000.00
40,000.00

30,000.00
40,000.00

15,000.00
65,000.00
200,000.00
212,000.00

30,000.00
70,000.00
100,000.00
-

30,000.00

50,000.00

12,500.00

25,000.00

25,000.00
62,500.00
597,500.00
40,000.00
100,000.00
50,000.00
300,000.00
107,500.00
597,500.00

300,000.00
50,000.00
10,000.00
20,000.00
150,000.00
70,000.00
300,000.00

4,000.00

150,000.00

369,000.00

Adjustment and
Eliminations
Credit

Consolidated
Statements

310,000.00
130,000.00
64,000.00
35,500.00
8,000.00
72,500.00

16,000.00
4,000.00

4,000.00
10,000.00

4,000.00
2,000.00
210,000.00

62,500.00

52,500.00
4,000.00
369,000.00

75,000.00
72,500.00
44,000.00
(4,000.00)
107,500.00

59,500.00
64,000.00
8,000.00
72,500.00
45,000.00
135,000.00
321,000.00
210,000.00
(210,000.00)
25,000.00
730,000.00
86,000.00
110,000.00
70,000.00
300,000.00
107,500.00
673,500.00
52,500.00
4,000.00
730,000.00

STEPS TO PREPARE FINANCIAL STATEMENT WORKPAPER:

A
Schedule of excess allocation:
Fair value of initial investment
Implied fair value of Sol's net assets ($210.000 / 80%)
Book value of Sol's net assets
Excess of fair value over book value
Excess allocated to undervalued inventory
Excess allocated to udervalued equipment
Remainder excess allocated to Goodwill
Excess of fair value over book value
B

D
a
b
c

Schedule of income from Sol for 2006:

Share of Income from Sol (80% x $40.000)
Less:
Undervalued inventory sold out
Depreciation of undervalued equipment (80% x ($25.000 / 5 yrs))
Income from Sol for 2006
Schedule of investment account balance on Dec. 31, 2006:
Initial investment cost on Jan. 1, 2006
Add: Income from Sol for 2006
Less: Devidend from Sol (80% X $20000)
Investment account balance on Dec. 31, 2006

210,000.00
262,500.00
200,000.00
62,500.00
12,500.00
25,000.00
25,000.00
62,500.00
Platik:
32,000.00
10,000.00
4,000.00
18,000.00

210,000.00
18,000.00
16,000.00
212,000.00

Workpaper Journal
Adjustment for errors and omissions
<no adjustment>
Adjustment to eliminate intercompany profits and losses
<no adjustment>
Adjustment to eliminate income & devidend from subsidiary and to return investment in su
Income from Sol
18,000.00
Devidend from Sol
Investment in Sol
Adjustment ro record noncontrolling interest
Noncontrolling interest share of Sol's income (20% x $40.000)
8,000.00
Noncontrolling deviden (20% x $20.000)
Noncontrolling interest
Adjustment to eliminate reciprocal investment in subs and subsidiary's equity balances
Capital stock
150,000.00
Retained earnings
50,000.00
Unamortized excess
62,500.00
Investment in Sol (on Jan. 1, 2006)
Noncontrolling interest
Allocation and amortization excess
Allocations:
Inventory
12,500.00
Equipment
25,000.00
Goodwill
25,000.00

Unamortized excess
Amortizations:
COGS (80% x $12.500)
10,000.00
Inventory
Depreciation expense (80% x ($25.000 / 5 years))
4,000.00
Equipment
Adjustment to eliminate reciprocal balances (intercompany payables, recevables, revenues
Accounts payable
4,000.00
Accounts receivable

Sold out in 2006

Remain life 5 years

n investment in subs to its beginning of period

16,000.00
2,000.00

4,000.00
4,000.00

quity balances

210,000.00
52,500.00

62,500.00

10,000.00

4,000.00
evables, revenues and expenses)
4,000.00

PLASTIK CORPORATION AND SUBSIDIARY

Consolidated Financial Statement Workpapers
December 31, 2011
Plastik

90% Sol

Adjustment and
Eliminations
Debt

Income Statement:
Sales
Income from Sol
Gain on equipment
Cost of sales
Depreciation expenses
Other expenses
Noncontrolling interest share
Controlling share of net income
Retained Earning Statements:
Retained earning - Plastik
Retained earning - Sol
Add: controlling share of N/I
Less: dividends
Retained earnings - Dec. 31
Balance Sheet:
Cash
Accounts receivable - net
Dividends receivable
Inventories
Other current assets
Land
Building - net
Equipment - net
Investment in Sol

Goodwill
Unarmotized excess
Total assets
Accounts payable
Dividends payable
Other liabilities
Capital Stock, $10 par
Retained earnings
Total liabilies and equities
Noncontrolling interest Jan. 1
Noncontrolling interest Dec. 31

200,000.00
18,000.00

110,000.00

80,000.00
40,000.00
25,500.00

40,000.00
20,000.00
10,000.00

72,500.00

40,000.00

18,000.00
12,500.00
5,000.00
4,500.00

75,000.00
72,500.00
40,000.00

50,000.00
40,000.00
20,000.00

107,500.00

70,000.00

29,500.00
28,000.00
8,000.00
40,000.00

30,000.00
40,000.00

15,000.00
65,000.00
200,000.00
212,000.00

30,000.00
70,000.00
100,000.00
-

30,000.00

50,000.00

12,500.00

25,000.00

25,000.00
62,500.00
597,500.00
40,000.00
100,000.00
50,000.00
300,000.00
107,500.00
597,500.00

300,000.00
50,000.00
10,000.00
20,000.00
150,000.00
70,000.00
300,000.00

4,000.00

150,000.00

369,000.00

Adjustment and
Eliminations
Credit

Consolidated
Statements

310,000.00
132,500.00
65,000.00
35,500.00
4,500.00
72,500.00

16,000.00
4,000.00

4,000.00
12,500.00

5,000.00
2,000.00
210,000.00

62,500.00

52,500.00
500.00
369,000.00

75,000.00
72,500.00
44,000.00
(4,000.00)
107,500.00

59,500.00
64,000.00
8,000.00
70,000.00
45,000.00
135,000.00
320,000.00
210,000.00
(210,000.00)
25,000.00
726,500.00
86,000.00
110,000.00
70,000.00
300,000.00
107,500.00
673,500.00
52,500.00
500.00
726,500.00

STEPS TO PREPARE FINANCIAL STATEMENT WORKPAPER:

A
Schedule of excess allocation:
Fair value of initial investment
Implied fair value of Sol's net assets ($210.000 / 80%)
Book value of Sol's net assets
Excess of fair value over book value
Excess allocated to undervalued inventory
Excess allocated to udervalued equipment
Remainder excess allocated to Goodwill
Excess of fair value over book value
B

D
a
b
c

Schedule of income from Sol for 2006:

Share of Income from Sol (80% x $40.000)
Less:
Undervalued inventory sold out
Depreciation of undervalued equipment (80% x ($25.000 / 5 yrs))
Income from Sol for 2006
Schedule of investment account balance on Dec. 31, 2006:
Initial investment cost on Jan. 1, 2006
Add: Income from Sol for 2006
Less: Devidend from Sol (80% X $20000)
Investment account balance on Dec. 31, 2006

210,000.00
262,500.00
200,000.00
62,500.00
12,500.00
25,000.00
25,000.00
62,500.00
Platik:
32,000.00
10,000.00
4,000.00
18,000.00

210,000.00
18,000.00
16,000.00
212,000.00

Workpaper Journal
Adjustment for errors and omissions
<no adjustment>
Adjustment to eliminate intercompany profits and losses
<no adjustment>
Adjustment to eliminate income & devidend from subsidiary and to return investment in su
Income from Sol
18,000.00
Devidend from Sol
Investment in Sol
Adjustment ro record noncontrolling interest
Noncontrolling interest share of Sol's income (20% x $40.000)
4,500.00
Noncontrolling deviden (20% x $20.000)
Noncontrolling interest
Adjustment to eliminate reciprocal investment in subs and subsidiary's equity balances
Capital stock
150,000.00
Retained earnings
50,000.00
Unamortized excess
62,500.00
Investment in Sol (on Jan. 1, 2006)
Noncontrolling interest
Allocation and amortization excess
Allocations:
Inventory
12,500.00
Equipment
25,000.00
Goodwill
25,000.00

Unamortized excess
Amortizations:
COGS
12,500.00
Inventory
Depreciation expense ($25.000 / 5 years)
5,000.00
Equipment
Adjustment to eliminate reciprocal balances (intercompany payables, recevables, revenues
Accounts payable
4,000.00
Accounts receivable

Sold out in 2006

Remain life 5 years

Noncontrolling
8,000.00
2,500.00
1,000.00
4,500.00

n investment in subs to its beginning of period

16,000.00
2,000.00

4,000.00
500.00

quity balances

210,000.00
52,500.00

62,500.00

12,500.00

5,000.00
evables, revenues and expenses)
4,000.00