Pas Corporation acquired 80% of Sel Corporation's common stock on January 1,2009 for $ 240,000 cash The stockholders'equity of Sel at this time consisted of $ 150,000 capital stock and S 50,000 retained earnings The difference between the price paid by Pas and the underlying equity acquired in Sel was due to a sa building overvalued by $10,000 with 20 year useful life, equipment undervalued by $ 20,000 useful life 10 years, Land undervalued by $ 50,000 and the remainder to unrecorded patent with a 20 year life Straight line depreciation is used 9 The partially completed worksheet is avialable at the link 10 11 12 Required: 12 Required: 13 14 1) Provide the entries made by Pas on January 1, 2009 and subsequently for the year 15 To be done on separate worksheet - investor entries 6 7 2) Provide the consolidation entries /elimination entries at December 31, 2009 8 To be done on separate worksheet- elimination entries 9 0 3) Complete the consolidation worksheet and compute the consolidated totals for Pas and Sel 1 the year ended December 31, 2009 A1 A D E Elimination Entries Debit Credit F Consol'd Totals Pas Sel 210,000 INCOME STATEMENT Sales Income from Sel Cost of Sales Depreciation exp Other exp Noncontrolling interest share Net Income 200,000 69,200 -80,000 -40,000 -25,500 -80,000 -20,000 -20,000 123,700 90,000 3 Retained Earn Jan 1 75.000 50.000 Retained Earn Jan 1 Net income Dividends 75,000 50,000 123,700 90,000 -40,000 -20,000 Retained Earn Dec 31 158,700 120,000 40,000 40,000 BALANCE SHEET Cash Accounts Rec net Dividends Rec Inventories Land 29,500 28,000 8,000 40,000 15.000 30,000 50.000 3 Inventories Land 5 Building net - Equipment net Investment in Sel 40,000 30,000 15,000 50,000 65,000 70,000 200,000 120,000 293,200 678,700 350,000 Patent Total Assets Liab and Equity Accounts Payable Dividends payable Other liabilities Capital Stock at $ 10 par 70,000 100,000 50,000 300.000 50,000 10,000 20,000 Liab and Equity + 2 Accounts Payable 3 Dividends payable 4 Other liabilities 5 Capital Stock at $ 10 par Retained Earnings 7 Non Control Interest 70,000 50,000 100,000 10,000 50,000 20,000 300,000 150,000 158,700 120,000 3 Total Liab & Equity 678,700 350,000 Pas Corporation acquired 80% of Sel Corporation's common stock on January 1,2009 for $ 240,000 cash The stockholders'equity of Sel at this time consisted of $ 150,000 capital stock and S 50,000 retained earnings The difference between the price paid by Pas and the underlying equity acquired in Sel was due to a sa building overvalued by $10,000 with 20 year useful life, equipment undervalued by $ 20,000 useful life 10 years, Land undervalued by $ 50,000 and the remainder to unrecorded patent with a 20 year life Straight line depreciation is used 9 The partially completed worksheet is avialable at the link 10 11 12 Required: 12 Required: 13 14 1) Provide the entries made by Pas on January 1, 2009 and subsequently for the year 15 To be done on separate worksheet - investor entries 6 7 2) Provide the consolidation entries /elimination entries at December 31, 2009 8 To be done on separate worksheet- elimination entries 9 0 3) Complete the consolidation worksheet and compute the consolidated totals for Pas and Sel 1 the year ended December 31, 2009 A1 A D E Elimination Entries Debit Credit F Consol'd Totals Pas Sel 210,000 INCOME STATEMENT Sales Income from Sel Cost of Sales Depreciation exp Other exp Noncontrolling interest share Net Income 200,000 69,200 -80,000 -40,000 -25,500 -80,000 -20,000 -20,000 123,700 90,000 3 Retained Earn Jan 1 75.000 50.000 Retained Earn Jan 1 Net income Dividends 75,000 50,000 123,700 90,000 -40,000 -20,000 Retained Earn Dec 31 158,700 120,000 40,000 40,000 BALANCE SHEET Cash Accounts Rec net Dividends Rec Inventories Land 29,500 28,000 8,000 40,000 15.000 30,000 50.000 3 Inventories Land 5 Building net - Equipment net Investment in Sel 40,000 30,000 15,000 50,000 65,000 70,000 200,000 120,000 293,200 678,700 350,000 Patent Total Assets Liab and Equity Accounts Payable Dividends payable Other liabilities Capital Stock at $ 10 par 70,000 100,000 50,000 300.000 50,000 10,000 20,000 Liab and Equity + 2 Accounts Payable 3 Dividends payable 4 Other liabilities 5 Capital Stock at $ 10 par Retained Earnings 7 Non Control Interest 70,000 50,000 100,000 10,000 50,000 20,000 300,000 150,000 158,700 120,000 3 Total Liab & Equity 678,700 350,000