Poll Corporation paid $16,200 for a 90% interest in Swamp Corporation on January 1, 2017, when Swamp stockholders' equity consisted of $10,000 Capital Stock and $3,000 of Retained Earnings. The excess cost over book value was attributable to goodwill. Assume proportional pricing for the NCI.
Additional information:1. Poll sells merchandise to Swamp at 120% of Poll's cost. During 2017, Poll's sales to Swamp were $4,800, of which half of the merchandise remained in Swamp's inventory at December 31, 2017 (The 2017 ending inventory was sold in 2018.) During 2018, Poll's sales to Swamp were $6,000 of which 60% remained in Swamp's inventory at December 31, 2018. At year-end 2018, Swamp owed Poll $1,500 for the inventory purchased during 2018. 2. Poll Corporation sold equipment with a book value of $2,000 and a remaining useful life of four years and no salvage value to Swamp Corporation on January 1, 2018 for $2,800. Straight-line depreciation is used.
3. During 2018, Swamp sold to Poll land for $50,000 that had a book value of $20,000. Poll still owns the land at 12/31/18.
4. Separate company financial statements for Poll Corporation and Subsidiary at December 31, 2018 are summarized in the first two columns of the consolidation working papers. See Spreadsheet Tab.
5. The following information is available for 2017:
Swamp's income $4,000
Swamp's dividends received by Poll $1,800
1. What is the amount of goodwill shown in the consolidated balance sheet? 2. What amount of the intercompany Equipment net gain or loss adjustment be confirmed in 2018? Enter as a positive value if gain or a negative value if loss adjustment to net income to controlling interest. 3. What is the amount of the parent company intercompany inventory profit that must be unconfirmed in 2018? Enter as a positive value. 4. What is the amount of the subsidiary intercompany land gain profit that is confirmed in 2018? 5. What is the NonControlling Interest Claim on the Subsidiary's Net Income? Enter as a positive amount. 6. What is the Net Income Attributed to the Controlling Interest? 7. What are consolidated total assets in the Consolidated Balance Sheet? 8. What is the NonControlling Interest Claim on the Subsidiary's Equity at 12/31/18 as presented in the Consolidated Balance Sheet? 9. What is the adjustment to the land account in the elimination entries? Enter as a positive amount. 10. What are consolidated sales for 2018? ELIMINATIONS CONS TOT 14,000 74,000 INCOME STATEMENT FYE 12/31/12 Sales Equity in sub earnings gain on sale of equip Gain on sale of land Total revenues 60.000 4.600 4.600 30,000 44.000 30,000 109.400 65,400 Cost of goods sold Expenses 26.000 3.000 4.400 3.600 30,400 31,600 62,000 54.000 11,400 8.000 35.000 Total expenses Total Net Income Less net income to NCI Net income to controlling inter? 11.400 38.000 RETAINED EARNINGS STATEMENT Retained Earnings 1/1 9,500 5,000 14,500 Net income 11,400 36,000 47,400 Dividends declared 7,000 2,000 9,000 Retained Earnings 12/31 13,900 39.000 52,900 BALANCE SHEET 5,500 7.000 33,000 4,000 38,500 11.000 10,000 4,500 14,500 cash accts rec Dividends rec Inventory Other current assets Land Buildings, net Equipment, net Investment in S 50,000 3,500 53,500 9,000 24,000 20,400 33.000 20.400 Total assets 116.900 54.000 170.900 53.000 5.000 50.000 10.000 60,000 Accounts payable Dividends payable Other liabilities Common stock Paid in capital Retained earnings noncontrolling interest Total liabilities and equity 13,900 39,000 52.900 116,900 54,000 170,900 1. What is the amount of goodwill shown in the consolidated balance sheet? 2. What amount of the intercompany Equipment net gain or loss adjustment be confirmed in 2018? Enter as a positive value if gain or a negative value if loss adjustment to net income to controlling interest. 3. What is the amount of the parent company intercompany inventory profit that must be unconfirmed in 2018? Enter as a positive value. 4. What is the amount of the subsidiary intercompany land gain profit that is confirmed in 2018? 5. What is the NonControlling Interest Claim on the Subsidiary's Net Income? Enter as a positive amount. 6. What is the Net Income Attributed to the Controlling Interest? 7. What are consolidated total assets in the Consolidated Balance Sheet? 8. What is the NonControlling Interest Claim on the Subsidiary's Equity at 12/31/18 as presented in the Consolidated Balance Sheet? 9. What is the adjustment to the land account in the elimination entries? Enter as a positive amount. 10. What are consolidated sales for 2018? ELIMINATIONS CONS TOT 14,000 74,000 INCOME STATEMENT FYE 12/31/12 Sales Equity in sub earnings gain on sale of equip Gain on sale of land Total revenues 60.000 4.600 4.600 30,000 44.000 30,000 109.400 65,400 Cost of goods sold Expenses 26.000 3.000 4.400 3.600 30,400 31,600 62,000 54.000 11,400 8.000 35.000 Total expenses Total Net Income Less net income to NCI Net income to controlling inter? 11.400 38.000 RETAINED EARNINGS STATEMENT Retained Earnings 1/1 9,500 5,000 14,500 Net income 11,400 36,000 47,400 Dividends declared 7,000 2,000 9,000 Retained Earnings 12/31 13,900 39.000 52,900 BALANCE SHEET 5,500 7.000 33,000 4,000 38,500 11.000 10,000 4,500 14,500 cash accts rec Dividends rec Inventory Other current assets Land Buildings, net Equipment, net Investment in S 50,000 3,500 53,500 9,000 24,000 20,400 33.000 20.400 Total assets 116.900 54.000 170.900 53.000 5.000 50.000 10.000 60,000 Accounts payable Dividends payable Other liabilities Common stock Paid in capital Retained earnings noncontrolling interest Total liabilities and equity 13,900 39,000 52.900 116,900 54,000 170,900
