PARENT - Sea Shell

60% 20x5 20x6 20x7 20x8 20x9 20y0

Net income (loss) per books 300.00 (20.00) 50.00 150.00 60.00 80.00
Adjustments:
Dividend income 3.60 4.20 4.80
Intercompany sale of inventory
Unrealized ICGP (10.00)
Realized ICGP 8.00 1.50 0.50
Intercompany sale of PPE
Unrealized ICGorL (12.00)
Realized ICGorL - depreciation 2.00 2.00 2.00 2.00
Realized ICGorL - oustide sale 4.00
Net income (loss) per conso 298.00 (24.90) 56.70 156.80 66.00 80.00

SUBSIDIARY - Sea Shore

60% 3.00 20x5 20x6 20x7 20x8 20x9 20y0
Net income (loss) per books (30.00) 50.00 30.00 12.00 (30.00) 25.00
Adjustments:
Amortization of excess
Bonds payable 4.00 4.00 4.00 4.00 4.00 4.00
Equipment (5.00) (5.00) (5.00) (5.00) (5.00) (5.00)
Intercompany sale of inventory
Unrealized ICGP (6.00)
Realized ICGP 2.40 2.40 1.20
Intercompany sale of PPE
Unrealized ICGorL (4.20)
Realized ICGorL - depreciation 3.00 0.15 0.60 0.60 0.60 0.60
Realized ICGorL - oustide sale
Net income (loss) per conso (34.60) 47.35 30.80 11.60 (30.40) 24.60

Parent 298.00 (24.90) 56.70 156.80 66.00 80.00

Subsidiary (34.60) 47.35 30.80 11.60 (30.40) 24.60
Consolidated net income 263.40 22.45 87.50 168.40 35.60 104.60

2 pts each 2 pts each 2 pts each 2 pts each 2 pts each 2 pts each
Income (loss) attributable to NCI (13.84) 18.94 12.32 4.64 (12.16) 9.84
Income (loss) attributable to CI 277.24 3.51 75.18 163.76 47.76 94.76
Consolidated net income 263.40 22.45 87.50 168.40 35.60 104.60

Controlling Non controlling Net asset of

interest interest subsidiary in conso FS
Acquisition date 876.00 504.00 1,380.00
Subsidiary's net income, 3 months 44.85 29.90 74.75
Dividends paid by subsidiary (48.00) (32.00) (80.00)
12/31/20x4 2 pts each 872.85 501.90 1,374.75
Subsidiary's net income (20.76) (13.84) (34.60)
Dividends paid by subsidiary - -
12/31/20x5 2 pts each 852.09 488.06 1,340.15
Subsidiary's net income 28.41 18.94 47.35
Dividends paid by subsidiary (3.60) (2.40) (6.00)
12/31/20x6 2 pts each 876.90 504.60 1,381.50
Subsidiary's net income 18.48 12.32 30.80
Dividends paid by subsidiary (4.20) (2.80) (7.00)
12/31/20x7 2 pts each 891.18 514.12 1,405.30
Subsidiary's net income 6.96 4.64 11.60
Dividends paid by subsidiary (4.80) (3.20) (8.00)
12/31/20x8 2 pts each 893.34 515.56 1,408.90
Subsidiary's net income (18.24) (12.16) (30.40)
Dividends paid by subsidiary - -
12/31/20x9 2 pts each 875.10 503.40 1,378.50
Subsidiary's net income 14.76 9.84 24.60
Dividends paid by subsidiary - -
12/31/20y0 2 pts each 889.86 513.24 1,403.10
 ELIMINATING ENTRIES FOR THE 2018 CONSOLIDATED FINANCIAL STATEMENTS
ACQUISITION DATE ELIMINATING ENTRIES
Common stock 200.00
APIC 150.00
Retained earnings 705.00
Land 1 pt 50.00
Equipment 60.00
Goodwill 275.00
Treasury shares 40.00
Premium on bonds payable 20.00
Investment in subsidiary 876.00
NCI 504.00

PRIOR YEAR ELIMINATING ENTRIES (10-01-20X4 TO 12-31-20X7) CURRENT YEAR ELIMINATING ENTRIES (20x8)
Retained earnings, 01-01-20x8 537.00 Dividend income 4.80
Retained earnings, acquisition date 500.00 NCI 2 pts 3.20
Increase in subsidiary's retained earnings 37.00 Retained earnings/dividends declared 8.00
Elimination of parent's dividend income from subsidiary
Retained earnings 14.80
NCI 2 pts 14.80 Premium on bonds payable 4.00
Share of NCI in the change in subsidiary's RE Depreciation expense 5.00
Interest expense 2 pts 4.00
Premium on bonds payable 13.00 Accumulated depreciation 5.00
Retained earnings 3.25 1.95 Amortization of excess
NCI 1.30
Accumulated depreciation 2 pts 16.25 Income attributable to NCI 4.64
Amortization of excess for 3 years and 3 months NCI 2 pts 4.64
Share of NCI in the net income of subsidiary

DOWNSTREAM INTERCOMPANY SALE OF EQUIPMENT DOWNSTREAM INTERCOMPANY SALE OF EQUIPMENT

Retained earnings 12.00
Equipment 2 pts 28.00
Accumulated depreciation 40.00
Elimination of intercompany gain on sale of equipment

Accumulated depreciation 4.00 Accumulated depreciation 2.00

Retained earnings 4.00 Depreciation expense 2 pts 2.00
Realized intercompany gain on sale - depreciation (20x6 to 20x7) Realized intercompany gain on sale of equipment - downstream

UPSTREAM INTERCOMPANY SALE OF EQUIPMENT UPSTREAM INTERCOMPANY SALE OF EQUIPMENT

Retained earnings 2.52
NCI 2 pts 1.68
Equipment 13.80
Accumulated depreciation 18.00
Elimination of intercompany gain on sale of equipment

Accumulated depreciation 2 pts 0.75 Accumulated depreciation 0.60

Retained earnings 0.75 Depreciation expense 2 pts 0.60
Realized intercompany gain on sale - depreciation (20x6 to 20x7) Realized intercompany gain on sale of equipment - upstream