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Pedro Corp. controls the shares of Salva Corp. as much as 75% and sold downstream in 2011 and 2012. Stock investment took place on January
Pedro Corp. controls the shares of Salva Corp. as much as 75% and sold downstream in 2011 and 2012. Stock investment took place on January 1, 2011 with an investment cost of 600,000 while at that time Salva's shareholders' equity consisted of 300,000 share capital and 100,000 retained earnings. If there is excess cost of investment above the book value of the shareholders, it is recorded as goodwill and not amortized. Merchandise inventory transactions between the two companies: in 2011 there were sales of 160,000 and as of December 31, 2011 there were unsold inventories with unrealized profits of 20,000 while in 2012 there were sales of 200,000 and as of December 31, 2012 there were unused inventories sold with an unrealized profit of 40,000. There were 30,000 dividend receivables and the remaining 45,000 affiliated trade receivables at the end of 2012. In 2012, Salva received a net profit of 300,000 and distributed dividends of 100,000. Requested: Make an elimination and adjustment journal and complete the consolidated working papers for the two companies for the year ended December 31, 2012! Consolidated Working Paper op Pompa Company and Subsidiary om For the year ended Dec 31, 2012 (in thousands T Salva 1.000 Consolidation Pedro 1.400 205 (140 (290) 520) (180) Sale Income from Sola Cost of Goods Sold Operations Expense Noncochelling interest share Net Profit RETAINED EARNING Retained farning - 1 t Net Profit Dividen 575 365 375 (300) 300 (LDO) 640 380 160 200 Retained Earning - 31/12 BALANCE I Cash Accounts Receivable Dividend Receivable Supply Land Building - Net Famiomont - Net Investment in Salva 270 230 30 220 200 400 400 770 lbo 150 200 280 I 2.620 Goodwill Total Assets Accounts Pauelle I Dividen Debe Other Debt Capital Stock Retained eaming - 31/12 550 (00 430 900 640 2,620 - 1,150 250 40 TL BO 300 380 1,150 - I Noncentrating interest, January Doncontrolling Interest, December Total tiloilities and Equity
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