10 1) 4 One year later on December 31, 2021, Gold Co. reports and pays a cash dividend of $10,000. Gold Co. also records a $50,000 sale on 5 account to Platinum Co. which represents $30,000 worth of inventory for Gold Co.. By December 31, 2021 Platinum Co. sells $40,000 worth 6 of the $50,000 received from Gold Co. to outside third parties. Platinum Co. uses the FVE method and accounts for its investments using the 7 cost method. 8 9 Required: Prepare the consolidated net income schedule - showing the split of consolidated income between the Parent and the NCI. 112) Prepare the consolidated income statement - showing the split of consolidated income between the Parent and the NCI. 123) Prepare the consolidated statement of retained earnings'. 13 4) Prepare the consolidated balance sheet starting with the separate entity balance sheets and showing all the elimination entries. 14 15 Separate Entity Balance Sheets 31-Dec-21 16 Balance Sheet Balance Sheet 17 Platinum Co. Gold Co. 18 Current Assets Carrying Value Carrying Value 19 Cash 418,500 5,000 20 Accounts receivable 20,000 450,000 21 Inventory 10,000 700,000 22 Total Current Assets 448,500 1,155,000 23 Long-term Assets 24 Investment in Gold Co. 690,000 25 Machinery 475,000 26 Acc. depreciation, Machinery (122,000) 27 Machinery, net 353,000 28 Long-term investments 1,500,000 29 Total Long-term Assets 2,190,000 353,000 30 31 Total Assets 2,638,500 1,508,000 32 83 Current Liabilities 34 Accounts payable 300,000 395,000 35 Bank loan-current 100,000 36 Total Current Liabilities 400,000 395,000 800,000 600,000 600,000 800,000 100 1,638,400 1,638,500 100 312,900 313,000 2,638,500 1,508,000 31-Dec-21 Income Statement Income Statement Platinum Co. Gold Co. 37 Long-term Liabilities 38 Shareholder loan 39 Bank loan - long term 40 Total Long-term Liabilities 41 Equity 42 Common shares 43 Retained earnings 44 Total Equity 45 46 Total Liabilities and Equity 47 48 Check 49 50 51 Separate Entity Income Statements 52 53 54 Revenue 55 Revenue 56 Dividend income 57 Total Revenue 58 Expenses 59 Cost of sales 60 Operating Expenses 61 Net income 62 63 64 Separate Entity Statement of Retained Earnings' 65 66 67 Opening Retained Earnings 68 + Net income 69 - Dividends 70 Ending Retained Earnings 200,000 500,000 8,500 508,500 200,000 40,000 30,000 438,500 100,000 45,000 55,000 31-Dec-21 Retained Earnings Retained Earnings Platinum Co. Gold Co. 1,199,900 267,900 438,500 55,000 10,000 1,638,400 312,900 10 1) 4 One year later on December 31, 2021, Gold Co. reports and pays a cash dividend of $10,000. Gold Co. also records a $50,000 sale on 5 account to Platinum Co. which represents $30,000 worth of inventory for Gold Co.. By December 31, 2021 Platinum Co. sells $40,000 worth 6 of the $50,000 received from Gold Co. to outside third parties. Platinum Co. uses the FVE method and accounts for its investments using the 7 cost method. 8 9 Required: Prepare the consolidated net income schedule - showing the split of consolidated income between the Parent and the NCI. 112) Prepare the consolidated income statement - showing the split of consolidated income between the Parent and the NCI. 123) Prepare the consolidated statement of retained earnings'. 13 4) Prepare the consolidated balance sheet starting with the separate entity balance sheets and showing all the elimination entries. 14 15 Separate Entity Balance Sheets 31-Dec-21 16 Balance Sheet Balance Sheet 17 Platinum Co. Gold Co. 18 Current Assets Carrying Value Carrying Value 19 Cash 418,500 5,000 20 Accounts receivable 20,000 450,000 21 Inventory 10,000 700,000 22 Total Current Assets 448,500 1,155,000 23 Long-term Assets 24 Investment in Gold Co. 690,000 25 Machinery 475,000 26 Acc. depreciation, Machinery (122,000) 27 Machinery, net 353,000 28 Long-term investments 1,500,000 29 Total Long-term Assets 2,190,000 353,000 30 31 Total Assets 2,638,500 1,508,000 32 83 Current Liabilities 34 Accounts payable 300,000 395,000 35 Bank loan-current 100,000 36 Total Current Liabilities 400,000 395,000 800,000 600,000 600,000 800,000 100 1,638,400 1,638,500 100 312,900 313,000 2,638,500 1,508,000 31-Dec-21 Income Statement Income Statement Platinum Co. Gold Co. 37 Long-term Liabilities 38 Shareholder loan 39 Bank loan - long term 40 Total Long-term Liabilities 41 Equity 42 Common shares 43 Retained earnings 44 Total Equity 45 46 Total Liabilities and Equity 47 48 Check 49 50 51 Separate Entity Income Statements 52 53 54 Revenue 55 Revenue 56 Dividend income 57 Total Revenue 58 Expenses 59 Cost of sales 60 Operating Expenses 61 Net income 62 63 64 Separate Entity Statement of Retained Earnings' 65 66 67 Opening Retained Earnings 68 + Net income 69 - Dividends 70 Ending Retained Earnings 200,000 500,000 8,500 508,500 200,000 40,000 30,000 438,500 100,000 45,000 55,000 31-Dec-21 Retained Earnings Retained Earnings Platinum Co. Gold Co. 1,199,900 267,900 438,500 55,000 10,000 1,638,400 312,900