would you be interested in answering the attached question as well? If so I would need to attach the template

ADVANCED ACCOUNTING UNIT 3 - POST PROBLEM 1 1. Following are trial balances of P and S Company as of December 31, 200X. (Prior to the payment of dividends and recording S income using the equity method of accounting). Cash Inventories Other Assets Investment in S Plant Assets Current Liabilities Common Stock $5PV Common Stock $10 PV Additional Paid in Capital Retained Earnings Sales Cost of Goods Sold Operating expenses P Company $607,000 138,000 60,000 345,000 330,000 (120,000) (100,000) S Company $ 73,000 40,000 160,000 (100,000) (40,000) (20,000) (60,000) (120,000) 42,000 25,000 (200,000) (620,000) (860,000) 300,000 120,000 Other information: Differences between identifiable net assets of S Company on THE DATE OF THE ACQUISITION of S Company By P Company were: Fair Value Plant 250,000 Book Value 140,000 Difference 110,000 20 year life On January 1, 200X P Co. purchased S Co. for $345,000. Goodwill created on date of purchase was $115,000. On December 31, 200X S paid $20,000 in dividends. 1. Show journal entries for the payment of dividends by S and P's recording of S's net income using the equity method of accounting. 2. Prepare consolidation worksheet. 3. Prepare consolidated financial statements for the year ending December 31, 200X. Unit 3 Post Problem 1 P Company Ledger Investment in S Co. 345,000 Equity in Sub Earnings S Company Ledger Dividends 20,000 Credit Investment in S Company Equity in Subsidiary Earnings To accrue income earned by S Company Equity in Subsidiary Earnings Investment in S Company To recognize amortization (S net in from come effect) from the increases (decreases in fair market value for the assets and liabilities of the subsidiary on the date of acquisition. Cash 607,000 Cash 73,000 53,000 Debit 20,000 P CO AND SUBSIDIARY Working Paper for Consolidated Balance Sheet 12/31/200X Cash Investment in S Company To record receipt of cash dividend from subsidiary Consolidation Entry S: Common Stock Paid in Capital Retained Earnings (Beginning) Investment in S Company Eliminate subsidiary equity (beginning retained earnings) Consolidation Entry A: Plant Goodwill Investment in S Company Allocate subsidiary acquisition date fair value adjustments Consolidation Entry I: Equity in Subsidiary Earnings Investment in S Company Eliminate equity income Consolidation Entry D: Investment in S Company Dividends Paid Eliminate intercompany dividend Consolidation Entry E: Amortization Expense Plant Recognize current year excess fair value expenses 1. 2. 3. 4. 5. Entry S - Eliminate Subsidiary Equity (beginning retained earnings) Entry A - Allocate subsidiary acquisition date fair value adjustments Entry I - Eliminate Equity in Subsidiary Earnings Entry D - Eliminate the dividends paid to the parent by the subsidiary Adjust income/expense accounts because of fair market value adjustments P Company Income Statement: Revenue Net sales Equity in Sub Income Total revenue Expenses Cost of goods sold Operating expenses Total expense Net income S Company Debit Credit Consolidated 120,000 487,500 53,000 Statement Retained Earn: Beginning Retained Earn Net income Dividends End Retained Earnings Balance Sheet: Assets Cash Inventories Other assets Investment in S Co. Plant Goodwill Total Assets Liabilities & Equity Liabilities Common Stock $10 par Common Stock $ 5 par Paid In Capital Retained Earnings Total Liabilities & Equity 1. 2. 3. 4. 5. Entry S - Eliminate Subsidiary Equity (beginning retained earnings) Entry A - Allocate subsidiary acquisition date fair value adjustments Entry I - Eliminate Equity in Subsidiary Earnings Entry D - Eliminate the dividends paid to the parent by the subsidiary Adjust income/expense accounts because of fair market value adjustments (A) This amount represents the decrease in net income that resulted from the elimination of the equity in subsidiary earnings and the adjustment for the increase (decrease) in fair market values of the subsidiary assets and liabilities as of the date of acquisition. It must be "dropped down" to the computation of retained earnings. (B) Beginning retained earnings is eliminated in the consolidation entry. The ending retained earnings must be dropped down to the balance sheet. 115,000 Unit 3 Post Problem 1 P Company Ledger Investment in S Co. 345,000 20,000 53,000 5,500 Equity in Sub Earnings 5,500 53,000 S Company Ledger Dividends 20,000 Investment in S Company Equity in Subsidiary Earnings To accrue income earned by S Company 20,000 Credit P CO AND SUBSIDIARY Working Paper for Consolidated Balance Sheet 12/31/200X 20,000 53,000 Equity in Subsidiary Earnings Investment in S Company To recognize amortization (S net in from come effect) from the increases (decreases in fair market value for the assets and liabilities of the subsidiary on the date of acquisition. Cash 607,000 20,000 Cash 73,000 53,000 Debit Cash Investment in S Company To record receipt of cash dividend from subsidiary Consolidation Entry S: Common Stock Paid in Capital Retained Earnings (Beginning) Investment in S Company Eliminate subsidiary equity (beginning retained earnings) Consolidation Entry A: Plant Goodwill Investment in S Company Allocate subsidiary acquisition date fair value adjustments Consolidation Entry I: Equity in Subsidiary Earnings Investment in S Company Eliminate equity income Consolidation Entry D: Investment in S Company Dividends Paid Eliminate intercompany dividend Consolidation Entry E: Amortization Expense Plant Recognize current year excess fair value expenses 1. 2. 3. 4. 5. 20,000 P Company S Company 860,000 47,500 907,500 120,000 0 120,000 -300,000 -120,000 -42,000 -25,000 5,500 487,500 53,000 53,000 620,000 487,500 0 1,107,500 60,000 53,000 (20,000) 93,000 60,000 53,000 Debit Credit Consolidated 53,000 5,500 5,500 Income Statement: Revenue Net sales Equity in Sub Income Total revenue Expenses Cost of goods sold Operating expenses Total expense Net income 120,000 Statement Retained Earn: Beginning Retained Earn Net income Dividends End Retained Earnings 225,000 Balance Sheet: Assets Cash Inventories Other assets Investment in S Co. 40,000 20,000 60,000 110,000 115,000 Plant Goodwill Total Assets 47,500 627,000 138,000 60,000 372,500 53,000 113,000 20,000 20,000 53,000 40,000 0 0 330,000 0 1,527,500 160,000 0 253,000 120,000 100,000 40,000 0 20,000 93,000 253,000 20,000 110,000 115,000 120,000 225,000 47,500 5,500 680,000 178,000 60,000 0 594,500 115,000 1,627,500 47,500 20,000 20,000 5,500 Entry S - Eliminate Subsidiary Equity (beginning retained earnings) Entry A - Allocate subsidiary acquisition date fair value adjustments Entry I - Eliminate Equity in Subsidiary Earnings Entry D - Eliminate the dividends paid to the parent by the subsidiary Adjust income/expense accounts because of fair market value adjustments 5,500 Liabilities & Equity Liabilities Common Stock $10 par Common Stock $ 5 par Paid In Capital Retained Earnings Total Liabilities & Equity 1. 2. 3. 4. 5. 100,000 200,000 1,107,500 1,527,500 40,000 20,000 93,000 Entry S - Eliminate Subsidiary Equity (beginning retained earnings) Entry A - Allocate subsidiary acquisition date fair value adjustments Entry I - Eliminate Equity in Subsidiary Earnings Entry D - Eliminate the dividends paid to the parent by the subsidiary Adjust income/expense accounts because of fair market value adjustments (A) This amount represents the decrease in net income that resulted from the elimination of the equity in subsidiary earnings and the adjustment for the increase (decrease) in fair market values of the subsidiary assets and liabilities as of the date of acquisition. It must be "dropped down" to the computation of retained earnings. (B) Beginning retained earnings is eliminated in the consolidation entry. The ending retained earnings must be dropped down to the balance sheet. 220,000 0 100,000 200,000 1,107,500 1,627,500 UNIT 4 POST PROBLEM 1 On December 31, 200X P Corporation paid $300,000 cash for 80% of the common stock of S Company which becomes a subsidiary. Following information is shown prior to the acquisition being recorded: P Company Assets Cash Inventories Plant Total Liabilities and Equity 580,000 60,000 340,000 980,000 Liabilities Common Stock, $5pv Paid in Capital Retained Earnings Total 90,000 100,000 200,000 590,000 980,000 S Company Assets Inventories 20,000 Other assets 40,000 Plant 140,000 Total 200,000 S market values are: Plant Inventory Liabilities and Equity Liabilities 30,000 Long Term Debt 50,000 Common Stock, $10pv 40,000 Paid in Capital 20,000 Retained Earnings 60,000 Total 200,000 $250,000 $50,000 1. Prepare the entries in journal format to record the acquisition and post to the general edger accounts. 2. Prepare a consolidation workpaper. 3. Prepare consolidated balance sheet. UNIT 4 POST PROBLEM 2 Following are trial balances of Conglomerate and Sub Company as of December 31, 2010. Cash Inventories Investment in S Building Equipment Accounts Payable Common Stock Additional Paid in Capital Retained Earnings Sales Cost of Goods Sold Operating Expenses Conglomerate $1,440,000 60,000 560,000 400,000 120,000 (180,000) (1,800,000) (250,000) (120,000) (1,100,000) 700,000 170,000 Sub $ 120,000 40,000 280,000 180,000 (120,000) (100,000) (300,000) (60,000) (300,000) 200,000 60,000 Other information: Conglomerate purchased 90% of Sub Company on December 31, 2009 for $560,000. The totals above are for one year after the purchase. Differences between identifiable net assets of Sub Company on December 31, 2009 (the date of purchase) were: Building Equipment Fair Value 300,000 200,000 Book Value 280,000 180,000 Difference 20,000 20,000 (20 year life) (10 year life) Goodwill created on the date of purchase was $122,222. On December 31, 2010 Sub Company paid $10,000 in dividends. Requirements: No entries have been made on either C or S's books for dividends paid in 2010 and recording the sub's net income on C's books using the equity method. You must post entries to the appropriate accounts for the payment of the dividends in C's and S's accounts and recording the sub's net income on C's books using the equity method. This will change some of the balances above. . (Show entries in general journal and/or T Account format.) Prepare consolidated financial statements for the year ending December 31, 2010, using a consolidation worksheet showing the eliminations, if any. Prepare a consolidated balance sheet, income statement and statement of retained earnings. UNIT 4 POST PROBLEM 1 TEMPLATE P CORPORATION AND S CO. Working Paper for Consolidated Balance Sheet 12/31/200X Entry to record the purchase of S Company: Investment in S Company Cash Entry in the P Corporation General Ledger to record the purchase of 80% of S Company. Compuation of Goodwill Cash 580,000 Investment in S Co. ENTRIES ON CONSOLIDATION WORKSHEET Consolidation Entry S: Common Stock Paid in Capital Retained Earnings (Beginning) Investment in S Company Noncontrolling interest Eliminate subsidiary equity P Corporation S Company Net Assets at Book Value Inventory Other Assets Plant Liabilities Long Term Debt Net Assets at Book Net Assets at Market Paid $300,000 for 80% Noncontrolling interest 20% Acquisition date fair value Fair Market Value Goodwill 115,000 Controlling interest - 80% Noncontrolling interest - 20% Goodwill 115,000 S Company acquisition date fair value S Company acquisition date book value Fair value in excess of book value Fair value adjustments to: Plant Inventory Amount allocated to goodwill S Company Debit Credit Consolidated Assets Cash Inventories Other Assets Investment in S 115,000 Goodwill Allocation to Controlling and Noncontrolling Interest Total Controlling Fair value at acquisition date Relative fair value of S Company net a ssets (80% and 20%) Goodwill 115,000 Plant Goodwill Total Assets P Corporation Consolidated Balance Sheet Assets Liabilities and Equity Cash Current Liabilities Inventory Long Term debt Other Assets Noncontrolling Interest Plant Common Stock 5 Par Paid In Capital Goodwill Retained Earnings Total Total 115,000 Noncontrolling Liabilities & Equity Current Liabilities Long Term Debt Noncontrolling Interest 75,000 Noncontrolling Interest 20% of 260,000 + 23,000 goodwill = 75,000 Common Stock $5 par Common Stock $10 par Paid In Capital Retained Earnings Total Liabilities & Equity Consolidation Entry A: Plant Inventory Goodwill Investment in S Company Noncontrolling interest Allocate subsidiary acquisition date fair value adjustments Noncontrolling 75,000 5 2,000 23,000 TEMPLATE FOR UNIT 4 POST PROBLEM 2 Compute Goodwill as of date of purchase December 31, 2009 Common Stock Paid in capital Retained Earnings 12/31/2009 Market value excess - building Market value excess - equipment Net Assets at market value Net Assets at market purchased by Conglomerate Cash paid by Conglomerate for 90% Conglomerate Goodwill (90%) Total Goodwill (100%) Computation of Goodwill 100,000 300,000 60,000 20,000 20,000 500,000 90% 10% 450,000 50,000 90% 100% Computation of Sub Net Income Applicable to Parent As of December 31, 2010 Sub Sales Sub Cost of Goods Sub Op Expense 90% 36,000 560,000 110,000 12,222 122,222 Building Equipment Building Equipment Analysis of excess amortization for first year ending December 31, 2010 Fair Value Book Value ifferenceAmortize D Net 300,000 280,000 20,000 200,000 180,000 20,000 Life 20 year 10 year 90% Excess Amortization Investment in S 560,000 Cash XXXXXX 560,000 1,440,000 584,300 1,449,000 Equity in Subsidiary Earnings 33,300 Payment of Dividends By Subsidiary Cash 120,000 110,000 Dividend to Parent 9,000 10,000 Dividend to NCI 1,000 JOURNAL ENTRIES Debit Credit 12/31/2009 - On Conglomerate Books Investment in Sub Company Cash To record 90% interest in Sub Company 12/31/2010 - On Conglomerate Books Investment in Sub Company Eqity in sub Earnings To record 90% interest in sub income Cash Investment in Sub Company To record cash dividend paid from 90% owned subsidiary to Parent. Equity In sub earnings Investment in Sub earnings To record 90% of fair value amortizations of sub net assets. Consolidation Entry S Common Stock Additional paid in capial Retained Earnings, 12/31/2009 Investment in Sub Company @ 90% interest NCI Investment in Sub @ 10% interest To eliminate beginning stockholder's equity accounts of the subsidiary along with book value portion of investment. Dividend to NCI Consolidation Entry A Building Equipment Goodwill Investment in Sub Company NCI investment in Sub Company To recognize unamortized excess fair value as of Dec 31, 2010 and to allocate the unamortized fair value to the non controlling interest. Goodwill is attributable proportionately to controlling and noncontrolling interests. Consolidation Entry I Equity in income of Sub Investment in Sub Company To eliminate the impact of intercompany income accrued by Conglomerate. Consolidation Entry D Investment in Sub Dividends Paid To eliminate the impact of intercompany dividend payments made by the subsidiary to parent and NCI. Consolidation Entry E Amortization Expense Building Equipment To recognize excess amortization of fair value adjustments are individually recorded during the current period. Conglomerate and Sub Company Consolidated Worksheet For the year ended Dec. 31, 2010 Accounts Conglomerate INCOME STATEMENT Sales $1,100,000 Cost of Goods Sold 700,000 Operating Expenses 170,000 Amortization Expense 0 Equity in Income of Sub 33,300 Separate Company Net Income $263,300 Consolidated Net Income Non Controlling interest in Sub Income Net Income to Controlling Interest STATEMENT OF RETAINED EARNINGS Retained Earnings, 12/31//2009 $120,000 Net Income 263,300 Dividends Paid 0 Retained Earnings, 12/31/2010 $383,300 Sub $300,000 200,000 60,000 0 0 $40,000 $60,000 40,000 10,000 $90,000 BALANCE SHEET ASSETS Cash Inventories Investment in Sub Company $1,449,000 60,000 584,300 400,000 120,000 0 $2,613,300 280,000 180,000 Credit E I S D $110,000 40,000 Building Equipment Goodwill Total Assets Debit LIABILITIES AND SHAREHOLDER'S EQUITY Liabilities Accounts Payable $180,000 D S A I A A A E E $610,000 $120,000 SHAREHOLDER'S EQUITY NCI in Sub Company S A Common Stock 1,800,000 Additional Paid in Capital 250,000 Retained Earnings, 12/31/2009 383,300 Total Liabilities and Shareholder's Equity $2,613,300 Analysis of Non Controlling interest Beginning Sub net assets at book (100,000 + 300,000 + 60,000) x 10% Building excess 20,000 x 10% Equipment excess 20,000 x 10% Goodwill 122,222 x 10% Sub dividends 10,000 x 10% Excess amortization 3,000 x 10% Sub net income 40,000 x 10% 100,000 300,000 90,000 $610,000 S S Analysis of Non Controlling Interest in Subsidiary Net Income Subsidiary net income Excess amortization 10% Non Controlling Interest in subsidiary net income 64,922 3,700 Non Controlling Interest Consolidated Totals Analysis of excess amortization for first year Fair Value Book Value Difference Amortize Net Life 300,000 280,000 20,000 1,000 20 year 200,000 180,000 20,000 2,000 10 year 3,000 2,700 Excess Amortization UNIT 4 POST PROBLEM 1 On December 31, 200X P Corporation paid $300,000 cash for 80% of the common stock of S Company which becomes a subsidiary. Following information is shown prior to the acquisition being recorded: P Company Assets Cash Inventories Plant Total Liabilities and Equity 580,000 60,000 340,000 980,000 Liabilities Common Stock, $5pv Paid in Capital Retained Earnings Total 90,000 100,000 200,000 590,000 980,000 S Company Assets Inventories 20,000 Other assets 40,000 Plant 140,000 Total 200,000 S market values are: Plant Inventory Liabilities and Equity Liabilities 30,000 Long Term Debt 50,000 Common Stock, $10pv 40,000 Paid in Capital 20,000 Retained Earnings 60,000 Total 200,000 $250,000 $50,000 1. Prepare the entries in journal format to record the acquisition and post to the general edger accounts. 2. Prepare a consolidation workpaper. 3. Prepare consolidated balance sheet. UNIT 4 POST PROBLEM 2 Following are trial balances of Conglomerate and Sub Company as of December 31, 2010. Cash Inventories Investment in S Building Equipment Accounts Payable Common Stock Additional Paid in Capital Retained Earnings Sales Cost of Goods Sold Operating Expenses Conglomerate $1,440,000 60,000 560,000 400,000 120,000 (180,000) (1,800,000) (250,000) (120,000) (1,100,000) 700,000 170,000 Sub $ 120,000 40,000 280,000 180,000 (120,000) (100,000) (300,000) (60,000) (300,000) 200,000 60,000 Other information: Conglomerate purchased 90% of Sub Company on December 31, 2009 for $560,000. The totals above are for one year after the purchase. Differences between identifiable net assets of Sub Company on December 31, 2009 (the date of purchase) were: Building Equipment Fair Value 300,000 200,000 Book Value 280,000 180,000 Difference 20,000 20,000 (20 year life) (10 year life) Goodwill created on the date of purchase was $122,222. On December 31, 2010 Sub Company paid $10,000 in dividends. Requirements: No entries have been made on either C or S's books for dividends paid in 2010 and recording the sub's net income on C's books using the equity method. You must post entries to the appropriate accounts for the payment of the dividends in C's and S's accounts and recording the sub's net income on C's books using the equity method. This will change some of the balances above. . (Show entries in general journal and/or T Account format.) Prepare consolidated financial statements for the year ending December 31, 2010, using a consolidation worksheet showing the eliminations, if any. Prepare a consolidated balance sheet, income statement and statement of retained earnings. UNIT 4 POST PROBLEM 1 TEMPLATE P CORPORATION AND S CO. Working Paper for Consolidated Balance Sheet 12/31/200X Entry to record the purchase of S Company: Investment in S Company Cash Entry in the P Corporation General Ledger to record the purchase of 80% of S Company. Compuation of Goodwill Cash 580,000 Investment in S Co. ENTRIES ON CONSOLIDATION WORKSHEET Consolidation Entry S: Common Stock Paid in Capital Retained Earnings (Beginning) Investment in S Company Noncontrolling interest Eliminate subsidiary equity P Corporation S Company Net Assets at Book Value Inventory Other Assets Plant Liabilities Long Term Debt Net Assets at Book Net Assets at Market Paid $300,000 for 80% Noncontrolling interest 20% Acquisition date fair value Fair Market Value Goodwill 115,000 Controlling interest - 80% Noncontrolling interest - 20% Goodwill 115,000 S Company acquisition date fair value S Company acquisition date book value Fair value in excess of book value Fair value adjustments to: Plant Inventory Amount allocated to goodwill S Company Debit Credit Consolidated Assets Cash Inventories Other Assets Investment in S 115,000 Goodwill Allocation to Controlling and Noncontrolling Interest Total Controlling Fair value at acquisition date Relative fair value of S Company net a ssets (80% and 20%) Goodwill 115,000 Plant Goodwill Total Assets P Corporation Consolidated Balance Sheet Assets Liabilities and Equity Cash Current Liabilities Inventory Long Term debt Other Assets Noncontrolling Interest Plant Common Stock 5 Par Paid In Capital Goodwill Retained Earnings Total Total 115,000 Noncontrolling Liabilities & Equity Current Liabilities Long Term Debt Noncontrolling Interest 75,000 Noncontrolling Interest 20% of 260,000 + 23,000 goodwill = 75,000 Common Stock $5 par Common Stock $10 par Paid In Capital Retained Earnings Total Liabilities & Equity Consolidation Entry A: Plant Inventory Goodwill Investment in S Company Noncontrolling interest Allocate subsidiary acquisition date fair value adjustments Noncontrolling 75,000 5 2,000 23,000 TEMPLATE FOR UNIT 4 POST PROBLEM 2 Compute Goodwill as of date of purchase December 31, 2009 Common Stock Paid in capital Retained Earnings 12/31/2009 Market value excess - building Market value excess - equipment Net Assets at market value Net Assets at market purchased by Conglomerate Cash paid by Conglomerate for 90% Conglomerate Goodwill (90%) Total Goodwill (100%) Computation of Goodwill 100,000 300,000 60,000 20,000 20,000 500,000 90% 10% 450,000 50,000 90% 100% Computation of Sub Net Income Applicable to Parent As of December 31, 2010 Sub Sales Sub Cost of Goods Sub Op Expense 90% 36,000 560,000 110,000 12,222 122,222 Building Equipment Building Equipment Analysis of excess amortization for first year ending December 31, 2010 Fair Value Book Value ifferenceAmortize D Net 300,000 280,000 20,000 200,000 180,000 20,000 Life 20 year 10 year 90% Excess Amortization Investment in S 560,000 Cash XXXXXX 560,000 1,440,000 584,300 1,449,000 Equity in Subsidiary Earnings 33,300 Payment of Dividends By Subsidiary Cash 120,000 110,000 Dividend to Parent 9,000 10,000 Dividend to NCI 1,000 JOURNAL ENTRIES Debit Credit 12/31/2009 - On Conglomerate Books Investment in Sub Company Cash To record 90% interest in Sub Company 12/31/2010 - On Conglomerate Books Investment in Sub Company Eqity in sub Earnings To record 90% interest in sub income Cash Investment in Sub Company To record cash dividend paid from 90% owned subsidiary to Parent. Equity In sub earnings Investment in Sub earnings To record 90% of fair value amortizations of sub net assets. Consolidation Entry S Common Stock Additional paid in capial Retained Earnings, 12/31/2009 Investment in Sub Company @ 90% interest NCI Investment in Sub @ 10% interest To eliminate beginning stockholder's equity accounts of the subsidiary along with book value portion of investment. Dividend to NCI Consolidation Entry A Building Equipment Goodwill Investment in Sub Company NCI investment in Sub Company To recognize unamortized excess fair value as of Dec 31, 2010 and to allocate the unamortized fair value to the non controlling interest. Goodwill is attributable proportionately to controlling and noncontrolling interests. Consolidation Entry I Equity in income of Sub Investment in Sub Company To eliminate the impact of intercompany income accrued by Conglomerate. Consolidation Entry D Investment in Sub Dividends Paid To eliminate the impact of intercompany dividend payments made by the subsidiary to parent and NCI. Consolidation Entry E Amortization Expense Building Equipment To recognize excess amortization of fair value adjustments are individually recorded during the current period. Conglomerate and Sub Company Consolidated Worksheet For the year ended Dec. 31, 2010 Accounts Conglomerate INCOME STATEMENT Sales $1,100,000 Cost of Goods Sold 700,000 Operating Expenses 170,000 Amortization Expense 0 Equity in Income of Sub 33,300 Separate Company Net Income $263,300 Consolidated Net Income Non Controlling interest in Sub Income Net Income to Controlling Interest STATEMENT OF RETAINED EARNINGS Retained Earnings, 12/31//2009 $120,000 Net Income 263,300 Dividends Paid 0 Retained Earnings, 12/31/2010 $383,300 Sub $300,000 200,000 60,000 0 0 $40,000 $60,000 40,000 10,000 $90,000 BALANCE SHEET ASSETS Cash Inventories Investment in Sub Company $1,449,000 60,000 584,300 400,000 120,000 0 $2,613,300 280,000 180,000 Credit E I S D $110,000 40,000 Building Equipment Goodwill Total Assets Debit LIABILITIES AND SHAREHOLDER'S EQUITY Liabilities Accounts Payable $180,000 D S A I A A A E E $610,000 $120,000 SHAREHOLDER'S EQUITY NCI in Sub Company S A Common Stock 1,800,000 Additional Paid in Capital 250,000 Retained Earnings, 12/31/2009 383,300 Total Liabilities and Shareholder's Equity $2,613,300 Analysis of Non Controlling interest Beginning Sub net assets at book (100,000 + 300,000 + 60,000) x 10% Building excess 20,000 x 10% Equipment excess 20,000 x 10% Goodwill 122,222 x 10% Sub dividends 10,000 x 10% Excess amortization 3,000 x 10% Sub net income 40,000 x 10% 100,000 300,000 90,000 $610,000 S S Analysis of Non Controlling Interest in Subsidiary Net Income Subsidiary net income Excess amortization 10% Non Controlling Interest in subsidiary net income 64,922 3,700 Non Controlling Interest Consolidated Totals Analysis of excess amortization for first year Fair Value Book Value Difference Amortize Net Life 300,000 280,000 20,000 1,000 20 year 200,000 180,000 20,000 2,000 10 year 3,000 2,700 Excess Amortization