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Zigma Standard Income Statement Sales Other Expenses Depreciation Income from Standard Net Income 200,000 (90,000) (30,000) 37,000 117,000 137,000 (67,000) (20,000) Statement of Retained Earnings Beginning RE Net Income Less Dividends Declared Ending Retained Earnings 175,000 117,000 (32,000) 260,000 75,000 50,000 (10,000) 115,000 198,000 300,000 (120,000) 227,000 160,000 170,000 (85,000) 605,000 245,000 75,000 170,000 100,000 260,000 605,000 30,000 50,000 50,000 115,000 ### 245,000 Balance Sheet Current Assets Depreicable Assets Accumulated Depreciation Investment In Sub Total Assets Current Liabilities Long Term Liabilities Common Stock Retained Earnings Total Liabilities and Equity 50,000 Zigma Income Statement Sales 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 Investment in Sub 200,000 (90,000) (30,000) 37,000 117,000 137,000 (67,000) (20,000) Current Liabilities Long Term Liabilities Common Stock Retained Earnings Total Liabilities and Equity Consolidation 50,000 10,000 4,000 150,000 164,000 13,000 13,000 337,000 (167,000) (54,000) (100,000) 16,000 117,000 50,000 164,000 13,000 16,000 175,000 117,000 (32,000) 260,000 75,000 50,000 (10,000) 115,000 75,000 164,000 13,000 10,000 23,000 175,000 16,000 (32,000) 159,000 198,000 300,000 (120,000) 227,000 160,000 170,000 (85,000) 40,000 65,000 5,000 15,000 358,000 445,000 (144,000) (38,000) (61,000) 20,000 605,000 250,000 10,000 130,000 395,000 10,000 590,000 50,000 195,000 100,000 260,000 605,000 30,000 50,000 50,000 115,000 ### 245,000 50,000 239,000 24,000 80,000 245,000 100,000 160,000 289,000 24,000 585,000 Land Goodwill Total Assets Standard Eliminations Debit Credit 239,000 65,000 4,000 265,000 61,000 Equity Journal Entries Investment Cash To record Purchase of Stock Investment Standard Income - Standard Income Cash Investment in standard Dividend Income-s Investment-s Basic Elimination Entry Retained Earnings Common Stock Income from Standard NCI Income Dividend Investment in Standard 200,000 200,000 Investment Basis 150,000 327,000 Inccome from Standard 150,000 137,000 10,000 10,000 13,000 13,000 Basic 75,000 50,000 150,000 - NCI Investment Beginning Income 10,000 265,000 - Dividend Standard Investment 125,000 150,000 (10,000) 265,000 = Retained Earnings 75,000 150,000 (10,000) 215,000 Excess Value Entry Goodwill Building Land Differential 10,000 40,000 15,000 Accumulated Depreciation Standard Investment Excess Depreciation Entry Cost of Sales Depreciation Income from Standard NCI Income Accumulated Depreciation Entry Accumulated Depreciation Depreciable Assets NCI Investment 4,000 61,000 10,000 4,000 14,000 - 65,000 65,000 Standard Investment = Beginning 75,000 Goodwill 10,000 Income Ending (14,000) 61,000 10,000 Common Stock 50,000 50,000 Building 40,000 40,000 Accumulated Land Inventory Depreciation 15,000 10,000 15,000 (10,000) - (4,000) (4,000) Equity Journal Entries Already Posted on Parents Books Investment in Standard Cash To record Purchase of Stock Investment in Standard Income from Standard To record Income from Stardard Cash Investment in Standard To record Dividend Income in Standard Investment in Standard 200,000 200,000 150,000 150,000 10,000 10,000 14,000 14,000 To Record Additional Expenses Basic Elimination Entry Retained Earnings Common Stock Income from Standard NCI Income Basic 75,000 50,000 150,000 - Dividend Investment in Standard Excess Value Entry Goodwill Building Land 10,000 265,000 - Dividend Differential 10,000 40,000 15,000 Accumulated Depreciation Standard Investment Excess Depreciation Entry Cost of Sales Depreciation Income from Standard NCI Income Accumulated Depreciation Entry Accumulated Depreciation Depreciable Assets Beginning Income Beginning 4,000 61,000 10,000 4,000 14,000 65,000 65,000 Book value of Conger's net assets: Common stock ou $80,000 $210,000 Retained earnings 130,000 Income Ending Fair value increment: Land ($100,000 $20,000 200,000 Buildings ($400,0 180,000 $410,000 Fair value of net assets (470,000) Fair value of consideration give $ 60,000 Goodwill Investment Basis 326,000 Inccome from Standard 136,000 NCI Investment Standard Investment 125,000 150,000 = (10,000) 265,000 NCI Investment Standard Investment 75,000 (14,000) 61,000 = Retained Earnings 75,000 150,000 Common Stock 50,000 (10,000) 215,000 50,000 Goodwill 10,000 Building 40,000 10,000 40,000 Land 15,000 Inventory 10,000 15,000 (10,000) - Accumulated Depreciation (4,000) (4,000) Name __________________________________________________ Chapter 4 Quiz Zigma purchased 100% of Standard for $200K on January 1st 2XX1. The information below is from the December 31, 2XX1 accounts. At the time of purchase all FMV of all assets and liabilities equal book value, except for the following Description Book Value Fair Value Building $100,000 $130,000 10 Year Life 10,000 20,000 2 month life 5,000 20,000 Inventory Land Any excess from the purchase price will be allocated to goodwill. Requirement: Determine what the Income from Sub and Investment in Sub's ending balance should be to balance the Financials. Complete all elimination entries and the Consolidate Worksheet