consolidation work paper journal entries with notations
PAT CORPORATION AND SUBSIDIARY P 10-3 CONSOLIDATION WORKSHEET FOR THE YEAR ENDED DECEMBER 31, 2011 80% Adjustments & Eliminations Consolidated (in thousands) Pat Sal Debits Credits Statements INCOME STATEMENT Sales 1,233 700 1,933 Income from Sal 68 68 Cost of sales (610) (400) (1,010) | Other expenses (390) | (210) (600) | Preacquisition income 0 Noncontrolling interest sha 0 Net income 301 90 391 RETAINED EARNINGS Retained earnings beg 501 200 701 Net income 301 90 391 Dividends (200) (50) (250) Retained earnings end 602 240 842 BALANCE SHEET Cash 191 50 241 Other current assets 200 300 500 Plant assets 900 500 1,500 Investment in Sal 711 711 Goodwill 0 Total assets 2,002 950 2,952 Current liabilities 200 60 260 $10 preferred stock 100 100 Common stock 1,200 500 1,700 Other paid in capital 50 50 Retained earnings 602 240 842 Total equities 2,002 950 Noncontrolling interest - common 0 Noncontrolling interest-preferred 0 0 2,952P 10-3 [Preferred stock] Consolidation workpaper (subsidiary preferred stock, equity method, mid-year purchase) Financial statements for Pat and Sal Corporations for 201 1 are summarized as follows (in thousands): Pat Sal Combined Income and Retained Earnings Statements for the Year Ended December 31 Sales $1,233 $700 Income from Sal 68 Cost of sales (610) (400) Other expenses (390 (210) Net income 301 90 Add: Retained earnings January 1 501 200 Less: Dividends (200) 50) Retained earnings December 31 $ 602 $240 Pat Sal Balance Sheet at December 31 Cash $ 191 $ 50 Other current assets 200 300 Plant assets-net 900 600 Investment in Sal 711 Total assets $2,002 $950 Current liabilities $ 200 $ 60 $10 preferred stock 100 Common stock 1,200 500 Other paid-in capital 50 Retained earnings 602 240 Total equities $2,002 $950 Pat owns 90,000 shares of Sal's outstanding voting common stock at December 31, 2011. These shares were acquired in two lots as follows: Date Shares Purchase Price Lot 1 January 1, 2010 70,000 $490,000 Lot 2 April 1, 2011 20,000 152,000 The stockholders' equity of Sal at year-end 2009, 2010, and 2011 was as follows (in thousands): December 31 2009 2010 2011 $10 preferred stock, $100 par, cumulative $100 $100 $100 with no dividends in arrears Common stock, $5 par 500 500 500 Other paid-in capital 50 50 50 Retained earnings 150 200 240 Total stockholders' equity $800 $850 $890 Sal's net income for 201 1 is $90,000, earned proportionately throughout the year, and its quar- terly dividends of $12,500 are declared on March 15, June 15, September 15, and December 15. (Quarterly dividends of $12,500 include dividends on common stock and preferred stock.) There are no intercompany receivables or payables at December 31, 2011, and there have been no inter- company transactions other than dividends. REQUIRED: Prepare a consolidation workpaper for Pat and Subsidiary for 201 1
