Problem II. On January 1, 2017, Parent Co. acquired 80% of Sub Inc. by paying $800,000. Non-controlling interest was valued at $200,000. Sub reported common stock on that date of $520,000 with retained earnings of $352,000. A building was undervalued in the company's financial records by $18,000. This building had a ten-year (10) remaining useful life. Copyrights of $80,000 were not recognized in the subsidiarys records and should be amortized over 20 years. Sub earned net income and paid cash dividends as follows over the years:

Net Income Dividends Paid

2017 115,000 64,600

2018 144,400 71,600

2019 164,000 94,000

Problem II. Continued.

4. Using this partial spreadsheet below, post the relevant Consolidation Worksheet Entries from Question 3 above. Then, calculate for the period ended December 31, 2019 on the worksheet:

(a) consolidated net income

(b) non-controlling interest in Subs net income (show your calculation separately)

(c) net income to controlling interest.

Consolidation Entries NCI

Consolidated Debit

Accounts

Income Statement Revenues

Cost of goods sold Depreciation Expense Amortization Expense Equity in Subs earnings

Separate Net Income Consolidated

Net Income Non-Controlling Income Controlling Interest Income

Parent Sunb info in this order

Revenue

COGS

Depreciation

Amortization

Equity in sub earnings

Separate net income

consolidated net income

non controlling interest

controlling interest

so 810 is parent revene and 504 is sub revenue and so one :

(810,000) (504,000) 344,000 200,000 60,000 20,000 170,000 120,000

(126,560) - (362,560) (164,000)

Problem II. Continued. 4. Using this partial spreadsheet below, post the relevant Consolidation Worksheet Entries from Question 3 above. Then, calculate for the period ended December 31, 2019 on the worksheet: (a) consolidated net income (b) non-controlling interest in Sub's net income (show your calculation separately) (c) net income to controlling interest. NCI Consolidated Consolidation Entries Debit Credit Parent Sub Debit Accounts Income Statement Revenues Cost of goods sold Depreciation Expense Amortization Expense Equity in Sub's earnings Separate Net Income Consolidated Net Income Non-Controlling Income Controlling Interest Income (810,000) 344,000 60,000 170.000 (126,560) (362,560) (504.000) 200,000 20,000 120.000 (164,000) Problem II. On January 1, 2017, Parent Co. acquired 80% of Sub Inc. by paying $800,000. Non-controlling interest was valued at $200,000. Sub reported common stock on that date of $520,000 with retained earnings of $352,000. A building was undervalued in the company's financial records by $18,000. This building had a ten-year (10) remaining useful life. Copyrights of $80,000 were not recognized in the subsidiary's records and should be amortized over 20 years. Sub earned net income and paid cash dividends as follows over the years: Net Income Dividends Paid 2017 115,000 64,600 2018 144,400 71,600 2019 164,000 94,000 Problem II. Continued. 4. Using this partial spreadsheet below, post the relevant Consolidation Worksheet Entries from Question 3 above. Then, calculate for the period ended December 31, 2019 on the worksheet: (a) consolidated net income (b) non-controlling interest in Sub's net income (show your calculation separately) (c) net income to controlling interest. NCI Consolidated Consolidation Entries Debit Credit Parent Sub Debit Accounts Income Statement Revenues Cost of goods sold Depreciation Expense Amortization Expense Equity in Sub's earnings Separate Net Income Consolidated Net Income Non-Controlling Income Controlling Interest Income (810,000) 344,000 60,000 170.000 (126,560) (362,560) (504.000) 200,000 20,000 120.000 (164,000) Problem II. On January 1, 2017, Parent Co. acquired 80% of Sub Inc. by paying $800,000. Non-controlling interest was valued at $200,000. Sub reported common stock on that date of $520,000 with retained earnings of $352,000. A building was undervalued in the company's financial records by $18,000. This building had a ten-year (10) remaining useful life. Copyrights of $80,000 were not recognized in the subsidiary's records and should be amortized over 20 years. Sub earned net income and paid cash dividends as follows over the years: Net Income Dividends Paid 2017 115,000 64,600 2018 144,400 71,600 2019 164,000 94,000