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Name____________________________________________________________________ . On January 1, 20X9, Zigma Company acquired 90 percent of Standard Company's common shares at the underlying book value. Zigma paid $90,000 for the 90% ownership. Zigma uses the equity method in accounting for its ownership of Standard. On December 31, 20X9, the financials of the two companies are attached as part of the Consolidated Worksheet. During the year, Standard sold to Zigma land for $50K. Standard had purchased the land for $25K. Zigma still held the land at the end of of 20X10. 1. Prepare all the eliminating entries needed as of December 31, 20X9 and complete the below consolidated worksheet. (Hint: I suggest that you reconcile the \"Investment in Standard \"and \"Income from Standard\" accounts by determining the equity entries that were made during the year). December 31, 20X9 Zigma Standard Income Statement Sales 227,000 Gain on Land Sale 162,000 25,000 Other Expenses (90,000) (70,000) Depreciation (30,000) (17,000) Income from Standard 67,500 Net Income 174,500 100,000 174,500 100,000 NCI Net Income CI Net Income Statement of Retained Earnings Beginning RE 175,000 50,000 Net Income 174,500 100,000 Less Dividends Declared (32,000) (10,000) Ending Retained Earnings 317,500 140,000 Current Assets 209,000 185,000 Depreicable Assets 300,000 170,000 (120,000) (85,000) Balance Sheet Accumulated Depreciation Land Investment in Standard Total Assets 50,000 148,500 587,500 270,000 50,000 30,000 Long Term Liabilities 120,000 50,000 Common Stock 100,000 50,000 Retained Earnings 317,500 140,000 Current Liabilities NCI Share of Assets Total Liabilities and Equity 587,500 270,000 Name____________________________________________________________________ December 31, 20X9 Zigma Income Statement Sales Gain on Land Sale Other Expenses Depreciation Income from Standard Net Income NCI Net Income CI Net Income Statement of Retained Earnings Beginning RE Net Income Less Dividends Declared Ending Retained Earnings Balance Sheet Current Assets Depreicable Assets Accumulated Depreciation Land Investment in Standard Total Assets Current Liabilities Long Term Liabilities Common Stock Retained Earnings NCI Share of Assets Total Liabilities and Equity 227,000 (90,000) (30,000) 67,500 174,500 Standard 162,000 25,000 (70,000) (17,000) 100,000 174,500 100,000 175,000 174,500 (32,000) 317,500 50,000 100,000 (10,000) 140,000 209,000 300,000 (120,000) 50,000 148,500 587,500 185,000 170,000 (85,000) 50,000 120,000 100,000 317,500 587,500 30,000 50,000 50,000 140,000 270,000 Elimination Entries Debit Credit 389,000 (160,000) (47,000) 182,000 (7,500) 174,500 ### ### 92,500 7,500 100,000 ### 100,000 150,000 270,000 ### 150,000 200,000 Consolidated 10,000 10,000 175,000 174,500 (32,000) 317,500 25,000 ### 173,500 394,000 470,000 (205,000) 25,000 684,000 10,000 16,500 26,500 80,000 170,000 100,000 317,500 16,500 684,000 Zigma holds on to Land 31-Dec-10 Zigma Income Statement Sales Gain on Land Sale Other Expenses Depreciation Income from Standard Net Income NCI Net Income CI Net Income Statement of Retained Earnings Beginning RE Net Income Less Dividends Declared Ending Retained Earnings Balance Sheet Current Assets Depreicable Assets Accumulated Depreciation Land Investment in Standard Total Assets Current Liabilities Long Term Liabilities Common Stock Retained Earnings NCI Share of Assets Total Liabilities and Equity 200,000 (90,000) (30,000) 9,000 89,000 Standard 100,000 (70,000) (20,000) 10,000 89,000 10,000 317,500 89,000 406,500 140,000 10,000 150,000 302,500 300,000 (120,000) 50,000 157,500 690,000 195,000 170,000 (85,000) 63,500 120,000 100,000 406,500 690,000 30,000 50,000 50,000 150,000 280,000 280,000 300,000 (160,000) (50,000) 90,000 (1,000) 89,000 ### 9,000 1,000 10,000 ### 10,000 150,000 317,500 89,000 406,500 22,500 22,500 25,000 180,000 205,000 497,500 470,000 (205,000) 25,000 787,500 20,000 20,000 93,500 170,000 100,000 406,500 17,500 787,500 ### 150,000 2,500 202,500 Journal Entries December 31, 20X9 Basic Elimination Entry Common Stock 50,000 Retained Earnings 50,000 Income from Sub 67,500 NCI share of NI 7,500 Investment 148,500 NCI share of Assets 16,500 Dividends 10,000 Accumulated Depreciation Accumulated Depreciation 68,000 Depreciable Assets 68,000 Equity Purchase of Sub Investment Cash 90,000 90,000 Net Income of Sub Investment Income from Sub 90,000 90,000 Unrealized Gain Income from Sub Investment 22,500 22,500 Dividends Cash Investment 9,000 9,000 Inter-company Elimination Gain on Sale Land 25,000 25,000 December 31, 20X10 Basic Elimination Entry Common Stock Retained Earnings 50,000 140,000 Income from Sub 9,000 NCI share of NI 1,000 Investment 180,000 NCI share of Assets 20,000 Accumulated Depreciation Accumulated Depreciation Depreciable Assets 68,000 68,000 Equity Net Income from Sub Investment Income from Sub 9,000 9,000 Unrealized Gain None Intercompany Elimination Investment NCI share of Assets Land 22,500 2,500 25,000 Name____________________________________________________________________ . On January 1, 20X9, Zigma Company acquired 90 percent of Standard Company's common shares at the underlying book value. Zigma paid $76,500 for the 90% ownership. Zigma uses the equity method in accounting for its ownership of Standard. On December 31, 20X9, the financials of the two companies are attached as part of the Consolidated Worksheet. During the year, Standard sold to Zigma land for $40K. Standard had purchased the land for $20K. Zigma still held the land at the end of of 20X10. In 20X11, Zigma sold the land for $70K. 1. Prepare all the eliminating entries needed as of December 31, 20X9, 20X10 and 20X11 and complete the consolidated worksheet. (Hint: I suggest that you reconcile the \"Investment in Standard \"and \"Income from Standard\" accounts by determining the equity entries that were made during the year). December 31, 20X9 Zigma Income Statement Sales Gain on Land Sale Other Expenses Depreciation Income from Standard Net Income NCI Net Income 227,000 Standard 107,000 30,000 (90,000) (70,000) (30,000) 18,000 125,000 (17,000) 50,000 Name____________________________________________________________________ CI Net Income Statement of Retained Earnings Beginning RE Net Income Less Dividends Declared Ending Retained Earnings 175,000 125,000 35,000 50,000 (32,000) 268,000 (10,000) 75,000 222,500 300,000 120,000 170,000 Balance Sheet Current Assets Depreicable Assets Accumulated Depreciation Land Investment in Standard Total Assets (120,000) 50,000 85,500 538,000 Current Liabilities Long Term Liabilities Common Stock Retained Earnings NCI Share of Assets Total Liabilities and Equity 50,000 120,000 100,000 268,000 538,000 (85,000) 205,000 30,000 50,000 50,000 75,000 205,000 December 31, 20X10 Zigma Standard Income Statement Sales Gain on Land Sale 200,000 Other Expenses (90,000) (70,000) (30,000) 9,000 89,000 (20,000) Depreciation Income from Standard Net Income NCI Net Income CI Net Income Statement of Retained Earnings Beginning RE Net Income Less Dividends Declared Ending Retained Earnings 100,000 - 268,000 89,000 357,000 10,000 75,000 10,000 85,000 Name____________________________________________________________________ Balance Sheet Current Assets Depreicable Assets Accumulated Depreciation Land Investment in Standard Total Assets Current Liabilities Long Term Liabilities Common Stock Retained Earnings NCI Share of Assets Total Liabilities and Equity 302,500 300,000 (120,000) 50,000 94,500 627,000 50,000 120,000 100,000 357,000 627,000 130,000 170,000 (85,000) 215,000 30,000 50,000 50,000 85,000 215,000 December 31, 20X9 Zigma Income Statement Sales Gain on Land Sale Other Expenses Depreciation Income from Standard Net Income NCI Net Income CI Net Income Statement of Retained Earnings Beginning RE Net Income Less Dividends Declared Ending Retained Earnings Balance Sheet Current Assets Depreicable Assets Accumulated Depreciation Land Investment in Standard Total Assets Current Liabilities Long Term Liabilities Common Stock Retained Earnings NCI Share of Assets Total Liabilities and Equity 227,000 (90,000) (30,000) 27,000 134,000 Standard 107,000 30,000 (70,000) (17,000) 50,000 134,000 50,000 175,000 134,000 (32,000) 277,000 35,000 50,000 (10,000) 75,000 222,500 300,000 (120,000) 50,000 94,500 547,000 120,000 170,000 (85,000) 50,000 120,000 100,000 277,000 547,000 30,000 50,000 50,000 75,000 ### 205,000 205,000 Zigma holds on to Land 31-Dec-10 Zigma Income Statement Sales Gain on Land Sale Other Expenses Depreciation 200,000 (90,000) (30,000) Standard 100,000 (70,000) (20,000) Eliminations Debit Credit Consolidated Income from Standard Net Income NCI Net Income CI Net Income Statement of Retained Earnings Beginning RE Net Income Less Dividends Declared Ending Retained Earnings Balance Sheet Current Assets Depreicable Assets Accumulated Depreciation Land Investment in Standard Total Assets Current Liabilities Long Term Liabilities Common Stock Retained Earnings NCI Share of Assets Total Liabilities and Equity 9,000 89,000 10,000 89,000 10,000 277,000 89,000 366,000 75,000 10,000 ### 85,000 302,500 300,000 (120,000) 50,000 103,500 636,000 130,000 170,000 (85,000) 50,000 120,000 100,000 366,000 636,000 30,000 50,000 50,000 85,000 ### 215,000 215,000 Zigma sold land for $70K 31-Dec-11 Zigma Income Statement Sales Gain on Land Sale Other Expenses Depreciation Income from Standard Net Income NCI Net Income CI Net Income Statement of Retained Earnings Beginning RE Standard 230,000 20,000 (90,000) (30,000) 54,000 184,000 130,000 (70,000) (20,000) 184,000 40,000 366,000 85,000 40,000 Net Income Less Dividends Declared Ending Retained Earnings Balance Sheet Current Assets Depreicable Assets Accumulated Depreciation Land Investment in Standard Total Assets Current Liabilities Long Term Liabilities Common Stock Retained Earnings NCI Share of Assets Total Liabilities and Equity 184,000 550,000 40,000 (5,000) 120,000 487,000 300,000 (120,000) 153,000 820,000 165,000 170,000 (85,000) 50,000 120,000 100,000 550,000 820,000 30,000 50,000 50,000 120,000 ### 250,000 250,000