Questions are attached. I would like to know if you could provide the answer tonight by 10:00 pm or if you need more time, please let me know how long? Thank you.
Q1 P Corporation acquired 80% of S Corporation on January 1, 2011 for $240,000 cash when S's stockholders' equity consisted of $100,000 of Common Stock and $30,000 of Retained Earnings. The difference between the price paid by P and the underlying equity acquired in S was allocated solely to a patent amortized over 10 years. P sold merchandise to S during the year in the amount of $30,000. $10,000 worth of inventory is still on hand at the end of the year with an unrealized profit of $4,000. The separate company statements for P and S appear in the first two columns of the partially completed consolidated workpaper. Required: Complete the consolidated workpaper for P and S for the year 2011. Q2 On January 1, 2011, Porter Company purchased an 80% interest in the capital stock of Shilo Company for $3,400,000. At that time, Shilo Company had common stock of $2,200,000 and retained earnings of $620,000. Porter Company uses the cost method to record its investment in Shilo Company. Differences between the fair value and the book value of the identifiable assets of Shilo Company were as follows: Fair Value in Excess of Book Value Equipment Land Inventory $400,000 200,000 80,000 The book values of all other assets and liabilities of Shilo Company were equal to their fair values on January 1, 2011. The equipment had a remaining life of five years on January 1, 2011; the inventory was sold in 2011. Shilo Company's net income and dividends declared in 2011 were as follows: Year 2011 Net Income of $400,000; Dividends Declared of $100,000 Required: Prepare a consolidated statements workpaper for the year ended December 31, 2012 using the partially completed worksheet. PORTER COMPANY AND SUBSIDIARY Consolidated Statements Workpaper For the Year Ended December 31, 2012 Porter Shilo Eliminations Noncontrolling Consolidated Company Company Dr. Cr. Interest Balances Income Statement Sales Dividend Income Total Revenue Cost of Goods Sold Depreciation Expense Other Expenses Total Cost & Expenses Net/Consolidated Income Noncontrolling Interest in Income Net Income to Retained Earnings Retained Earnings Statement 1/1 Retained Earnings Porter Company Shilo Company Net Income from above Dividends Declared Porter Company Shilo Company 12/31 Retained Earnings to Balance Sheet Balance Sheet Cash Accounts Receivable Inventory Investment in Shilo Company Difference between Implied and Book Value Land Plant and Equipment Total Assets Accounts Payable Notes Payable Common Stock: Porter Company Shilo Company Retained Earnings from above 1/1 Noncontrolling Interest in Net Assets 12/31 Noncontrolling Interest in Net Assets Total Liabilities & Equity 4,400,000 1,800,000 192,000 4,592,000 1,800,000 3,600,000 800,000 160,000 120,000 240,000 200,000 4,000,000 1,120,000 592,000 680,000 592,000 680,000 2,000,000 592,000 920,000 680,000 (360,000) (240,000) 2,232,000 1,360,000 Porter Shilo Eliminations Noncontrolling Consolidated Company Company Dr. Cr. Interest Balances 280,000 1,040,000 960,000 3,400,000 1,440,000 7,120,000 528,000 360,000 260,000 760,000 700,000 1,280,000 1,120,000 4,120,000 440,000 120,000 4,000,000 2,200,000 2,232,000 1,360,000 7,120,000 4,120,000 P Corporation and Subsidiary Consolidated Statements Workpaper at December 31, 2011 P Corp. Income Statement Sales Dividend Income Cost of Sales Other Expenses Noncontrolling Interest in Income Net Income Retained Earnings Statement Retained Earnings 1/1 Add: Net Income Less: Dividends Retained Earnings 12/31 Balance Sheet Cash Accounts Receivable-net Inventories Patent Land Equipment and Buildings-net Investment in S Corporation Total Assets Equities Accounts Payable Common Stock Retained Earnings 1/1 Noncontrolling Interest in Net Assets 12/31 Noncontrolling Interest in Net Assets Total Equities S Corp. 200,000 16,000 (92,000) (23,000) 150,000 (47,000) (40,000) 101,000 63,000 110,000 101,000 ( 30,000) 181,000 30,000 63,000 (20,000) 73,000 20,000 120,000 140,000 19,000 55,000 80,000 270,000 600,000 240,000 695,000 420,000 430,000 1,004,000 909,000 300,000 181,000 831,000 100,000 73,000 1,390,000 1,004,000 Eliminations Dr. Cr. Noncontrolling Interest Consolidated Balances Q3. Pringle Company owns 104,000 of the 130,000 shares outstanding of Seely Corporation. Seely Corporation sold equipment to Pringle Company on January 1, 2011 for $740,000. The equipment was originally purchased by Seely Corporation on January 1, 2010 for $1,280,000 and at that time its estimated depreciable life was 8 years. The equipment is estimated to have a remaining useful life of four years on January 1, 2011. Both companies use the straight-line method to depreciate equipment. In 2012 Pringle Company reported net income from its independent operations of $3,270,000, and Seely Corporation reported net income of $820,000 and declared dividends of $60,000. Pringle Company uses the cost method to record the investment in Seely Company. Required: A. Prepare, in general journal form, the workpaper entries relating to the intercompany sale of equipment that are necessary in the December 31, 2012 consolidated financial statements workpapers. B. Calculate the amount of noncontrolling interest to be deducted from consolidated net income in the consolidated income statement for 2012. C. Calculate controlling interest in consolidated net income for 2012. Q4 Piper Company purchased Snead Company common stock through open-market purchases as follows: Acquired Date Shares Cost 1/1/09 1,500 $ 50,000 1/1/10 3,300 $ 90,000 1/1/11 6,600 $250,000 Snead Company had 12,000 shares of $20 par value common stock outstanding during the entire period. Snead had the following retained earnings balances on the relevant dates: January 1, 2009 January 1, 2010 January 1, 2011 December 31, 2011 $ 90,000 30,000 150,000 300,000 Snead Company declared no dividends in 2009 or 2010 but did declare $60,000 of dividends in 2011. Any difference between cost and book value is assigned to subsidiary land. Piper uses the equity method to account for its investment in Snead. Required: A. Prepare the journal entries Piper Company will make during 2010 and 2011 to account for its investment in Snead Company. B. Prepare workpaper eliminating entries necessary to prepare a consolidated statements workpaper on December 31, 2011. Q5 On January 1, 2008, Patel Company acquired 90% of the common stock of Seng Company for $650,000. At that time, Seng had common stock ($5 par) of $500,000 and retained earnings of $200,000. On January 1, 2010, Seng issued 20,000 shares of its unissued common stock, with a market value of $7 per share, to noncontrolling stockholders. Seng's retained earnings balance on this date was $300,000. Any difference between cost and book value relates to Seng's land. No dividends were declared in 2010. Required: A. Prepare the entry on Patel's books to record the effect of the issuance assuming the cost method. B. Prepare the elimination entries for the preparation of a consolidated statements workpaper on December 31, 2010 assuming the cost method
