On January 1, 20X1. Parent purchased shares of Subsidiary. The accountant started the financial statements below, but could not finish them. She also could not produce a statement of cash flows. You have decided to help her out because you are the well- trained Kangaroo and therefore an SCF expert Note, you are NOT required to produce the direct method of disclosing operating cash flows. The Company uses the EQUITY method of accounting for this investment Shares of Subsidiary outstanding 80.000 100% of the amortization of excess 9,000 Shares of Subsidiary acquired 8.000 Subsidiary's dividenda in zox1 4,000 Cost per share $ 4.50 Tax rate 30.003 Subsidiary's Income in 20X1 25.000 Estimated tax payment 7000 Tax depreciation 56,000 Parent Company Income Statement for the year ended December 31, 20X1 Statement of Retained Earnings Sales 755.000 for the year ended December 31, 20X1 Income from Subsidiary Beginning retained earnings $ 27,200 Cost of goods sold 337,000 Net Income Salary expense 291,000 Dividends (5.600) Amortization expense 4,000 Ending retained earnings Depreciation expense 37 000 Interest expense 8.000 Pretax income Tax expense Net Income Parent Company Balance Sheet as of December 31 Cash 20x0 49,600 $ Absolute Value of Change 20X1 33 200 $ 34,300 38,510 4,210 2,610 19,800 17,190 Accounts receivable Inventory Investment in Subsidiary Equipment Accumulated depreciation Patent 0 338,900 422,600 (108,400) (145,400) 40.000 36,000 83.700 37,000 4,000 Land 62,800 17,300 Total 45,500 419.700 5 $ Accounts payable Taxes payable 89,600 $ 116,400 26,800 13,000 16,900 1.100 400 156,200 Deferred taxes payable - Depreciation Dividends payable Noles payable Common stock (S1 par value) Additional paid-in capital Retained earnings Total $ 700 144,300 52,900 11.900 5.700 47,200 68,500 76,700 8.200 27 200 419,700 On January 1, 20X1. Parent purchased shares of Subsidiary. The accountant started the financial statements below, but could not finish them. She also could not produce a statement of cash flows. You have decided to help her out because you are the well- trained Kangaroo and therefore an SCF expert Note, you are NOT required to produce the direct method of disclosing operating cash flows. The Company uses the EQUITY method of accounting for this investment Shares of Subsidiary outstanding 80.000 100% of the amortization of excess 9,000 Shares of Subsidiary acquired 8.000 Subsidiary's dividenda in zox1 4,000 Cost per share $ 4.50 Tax rate 30.003 Subsidiary's Income in 20X1 25.000 Estimated tax payment 7000 Tax depreciation 56,000 Parent Company Income Statement for the year ended December 31, 20X1 Statement of Retained Earnings Sales 755.000 for the year ended December 31, 20X1 Income from Subsidiary Beginning retained earnings $ 27,200 Cost of goods sold 337,000 Net Income Salary expense 291,000 Dividends (5.600) Amortization expense 4,000 Ending retained earnings Depreciation expense 37 000 Interest expense 8.000 Pretax income Tax expense Net Income Parent Company Balance Sheet as of December 31 Cash 20x0 49,600 $ Absolute Value of Change 20X1 33 200 $ 34,300 38,510 4,210 2,610 19,800 17,190 Accounts receivable Inventory Investment in Subsidiary Equipment Accumulated depreciation Patent 0 338,900 422,600 (108,400) (145,400) 40.000 36,000 83.700 37,000 4,000 Land 62,800 17,300 Total 45,500 419.700 5 $ Accounts payable Taxes payable 89,600 $ 116,400 26,800 13,000 16,900 1.100 400 156,200 Deferred taxes payable - Depreciation Dividends payable Noles payable Common stock (S1 par value) Additional paid-in capital Retained earnings Total $ 700 144,300 52,900 11.900 5.700 47,200 68,500 76,700 8.200 27 200 419,700
