Acquisition details:

The parent acquired 75% of the sub in 2012.

the only differential is due to goodwill. The good will attributable to the parent is $150.

Pricing to the NCI is proportional.

The goodwill has not impaired since acquisition date.

ADDITIONAL INFORMATION

Intercompany merchandise sales totalled $300,000 during 2015. All intercompany balances have been

paid except for $50,000 in transit at December 31, 2015.

Unrealized profits in Ss inventory of merchandise purchased from P were $48,000 on December

31, 2014, and $60,000 on December 31, 2015.

S sold equipment with a six-year remaining life to P on January 3, 2013, at a gain of $96,000. P

still uses the equipment in its operations.

P sold land to S on July 1, 2015, at a gain of $40,000. S still holds the land at December 31, 2015.

P sold a building to S on July 1, 2015, at a gain of $80,000. The building has a 10-year remaining

life and is still used by Sum.

round above amounts to thousands.

REQUIRED:

Required: Carefully Follow and label each step. Show all work below on the spreadsheet tab.

1.Calculate the full amount of goodwill. Identify amounts attributable to the parent and

the NCI

2. Analyze each intercompany transaction. Label as either upstream

downstream.

3. Calculate Net income to the controlling interest for the year 2015

4. Verify the calculation of the balance in the acccount equity in sub

earnings and record the parent company entries with respect to its investment during 2015

5. Prepare all elimination entries for 2015.

6. Complete the consolidating spreadsheet for the year ended 2015.

7. Answer questions on the blue tab

the parent uses the equity method

INCOME STATEMENT	P	S
FYE 12/31/2015
Sales	2,520	2,000
Equity in sub earnings	184
Gain on building	80
Gain on land	40
Total revenues	2,824	2,000
Cost of goods sold	1,400	1,200
Depreciation Expense	304	160
Interest Expense	80
Other expenses and losses	184	240
Total expenses	1,968	1,600
Total Net income	856	400
Less net income to NCI
Net income to controlling interest	856	400
RETAINED EARNINGS
STATEMENT
Retained Earnings 1/1	750	400
Net income	856	400
Dividends declared	640	320
Retained Earnings 12/31	966	480
BALANCE SHEET
cash	108	276
Bond interest receivable		20
Other receivables-net	160	120
Inventory	320	200
Land	360	280
Buildings, net	600	720
Equipment, net	560	360
Investment in S	1,498
Available for sale securities		424
goodwill
Total assets	3,606	2,400
Accounts payable	200	320
Bond interest payable	40
10% bonds payable	800
Common stock	1,600	1,600
Retained earnings	966	480
noncontrolling interest
Total liabilities and equity	3,606	2,400

1. What is the Parent Company ONLY Confirmed net income?

2. What is the sub's Confirmed net income?

3. What is the net income to the NCI (enter as a positive amount)?

4. What are consolidated sales?

5. What are consolidated cost of goods sold?

6. What is consolidated depreciation expense?

7. What are consolidated total assets?

8. What is consolidated inventory?

9. What is consolidated equipment,net?

10. What is consolidated building, net?

11. What are consolidated other receivables?

12. What is consolidated goodwill?

13. What is consolidated accounts payable?

14. What is the balance for NCI as of 12/31/2015?

15. What is consolidated retained earnings as of 12/31/2015?