Question
In: Accounting
The December 31, 20X8, balance sheets for Pint Corporation and its 70 percent-owned subsidiary Saloon Company...
The December 31, 20X8, balance sheets for Pint Corporation and
its 70 percent-owned subsidiary Saloon Company contained the
following summarized amounts:
| PINT CORPORATION AND SALOON COMPANY | |||||||||
| Balance Sheets December 31, 20X8 |
|||||||||
| Pint Corporation |
Saloon Company |
||||||||
| Assets | |||||||||
| Cash & Receivables | $ | 105,000 | $ | 48,000 | |||||
| Inventory | 156,000 | 105,000 | |||||||
| Buildings & Equipment (net) | 313,000 | 292,000 | |||||||
| Investment in Saloon Company | 217,000 | ||||||||
| Total Assets | $ | 791,000 | $ | 445,000 | |||||
| Liabilities & Equity | |||||||||
| Accounts Payable | $ | 92,000 | $ | 79,000 | |||||
| Common Stock | 184,000 | 131,000 | |||||||
| Retained Earnings | 515,000 | 235,000 | |||||||
| Total Liabilities & Equity | $ | 791,000 | $ | 445,000 | |||||
Pint acquired the shares of Saloon Company on January 1, 20X7. On
December 31, 20X8, assume Pint sold inventory to Saloon during 20X8
for $113,000 and Saloon sold inventory to Pint for $314,000. Pint’s
balance sheet contains inventory items purchased from Saloon for
$99,000. The items cost Saloon $59,000 to produce. In addition,
Saloon’s inventory contains goods it purchased from Pint for
$28,000 that Pint had produced for $16,800. Assume Saloon reported
net income of $77,000 and dividends of $15,400.
Required:
a. Prepare all consolidation entries needed to complete a
consolidated balance sheet worksheet as of December 31, 20X8.
(If no entry is required for a transaction/event, select
"No journal entry required" in the first account field. Do not
round intermediate calculations.)
Consolidation Worksheet Entries
- Record the basic consolidation entry.
- Record the entry to defer this year's unrealized profit on inventory transfers.
Note: Enter debits before credits.
|
b. Prepare a consolidated balance sheet worksheet as of December
31, 20X8. (Do not round intermediate calculations. Values
in the first two columns (the "parent" and "subsidiary" balances)
that are to be deducted should be indicated with a minus sign,
while all values in the "Consolidation Entries" columns should be
entered as positive values. For accounts where multiple adjusting
entries are required, combine all debit entries into one amount and
enter this amount in the debit column of the worksheet. Similarly,
combine all credit entries into one amount and enter this amount in
the credit column of the worksheet.)
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Solutions
Expert Solution
a. Consolidation entries
| Date | Journal entry | Dr. | Cr. |
| 1 | Investment in Saloon Co. (11200+40000) | $ 51,200 | |
| To Income from Saloon co. | $ 51,200 | ||
| (Being Pint Corp.'s 70% share of Saloon co. recorded ) | |||
| 2 | Cash A/c | $ 10,780 | |
| To Investment in Saloon Co. | $ 10,780 | ||
| (Being 70% share of Saloon co. dividend recorded) | |||
| 3 | Income from Saloon co. | $ 11,200 | |
| To Investment in Saloon Co. | $ 11,200 | ||
| (Being deferred gross-profit from downstream sales 20X8 eliminated) | |||
| 4 | Income from Saloon co. | $ 28,000 | |
| To Investment in Saloon Co. | $ 28,000 | ||
| (Being deferred gross-profit from upstream sales 20X8 eliminated) | |||
| 5 | Common stock | $ 131,000 | |
| Retained earnings | $ 173,400 | ||
| Income from Saloon co. | $ 14,700 | ||
| NCI in NI of Saloon co. | $ 11,100 | ||
| To Dividends declared | $ 15,400 | ||
| To Investment in Saloon Co. | $ 217,000 | ||
| To NCI in NA of Saloon co. | $ 97,800 | ||
| (Being elimination entry recorded) | |||
| 6 | Sales (113000+314000) | $ 427,000 | |
| To COGS | $ 375,800 | ||
| To Inventory | $ 51,200 | ||
| (Being Deferral of unrealized profits on inventory transfers recorded) |
Notes -
1.
| Downstream Transactions | Amount |
| (Goods sold by Pint to Saloon) | |
| Ending inventory in Saloon | $ 28,000 |
| Less: cost of goods sold | $ (16,800) |
| Deferred profit | $ 11,200 |
In downstream transaction profit will be shared by Controlling interest only
2.
| Upstream Transactions | Amount |
| (Goods sold by Saloon to Pint) | |
| Ending inventory in Pint | $ 99,000 |
| Less: cost of goods sold | $ (59,000) |
| Deferred profit | $ 40,000 |
| CI share 70% | $ 28,000 |
| NCI share 30% | $ 12,000 |
3.
| Calculation of Retained earnings of Saloon co. as on 1/1/20X8 | Amount |
| Balance as on 31/12/20X8 | $ 235,000 |
| Less: Net income during the year | $ (77,000) |
| Add: Dividend paid | $ 15,400 |
| Balance as on 1/1/20X8 | $ 173,400 |
4.
| Calculation of Balance in Investment in Saloon and NCI | |||
| Particulars | CI 70% | NCI 30% | Total |
| Common stock of Saloon | $ 91,700 | $ 39,300 | $ 131,000 |
| Retained earnings 1/1/20X8 | $ 121,380 | $ 52,020 | $ 173,400 |
| Add: NI of Saloon | $ 53,900 | $ 23,100 | $ 77,000 |
| Less: Dividend declared | $ (10,780) | $ (4,620) | $ (15,400) |
| Less: Downstream deferred profit | $ (11,200) | $ (11,200) | |
| Less: Upstream deferred profit | $ (28,000) | $ (12,000) | $ (40,000) |
| Total | $ 217,000 | $ 97,800 | $ 314,800 |
5.
| Calculation of Income from Saloon & NCI of NI of Salon company | |||
| Particulars | Income from Saloon | NCI of NI of Salon company | Total |
| Net Income of Saloon | $ 53,900 | $ 23,100 | $ 77,000 |
| Less: Downstream deferred profit | $ (11,200) | $ (11,200) | |
| Less: Upstream deferred profit | $ (28,000) | $ (12,000) | $ (40,000) |
| Total | $ 14,700 | $ 11,100 | $ 25,800 |
b. Consolidated Balance sheet
| Elimination Entries | |||||
| Assets | Pint Corporation | Saloon company | Dr. | Cr. | Consolidated |
| Cash and receivables | $ 105,000 | $ 48,000 | $ 153,000 | ||
| Inventory | $ 156,000 | $ 105,000 | $ 51,200 | $ 209,800 | |
| Buildings & equipment (net) | $ 313,000 | $ 292,000 | $ 605,000 | ||
| Investment in Saloon Company | $ 217,000 | $ 217,000 | $ - | ||
| Total Assets | $ 791,000 | $ 445,000 | $ - | $ 268,200 | $ 967,800 |
| Liabilities & Equity | |||||
| Accounts payable | $ 92,000 | $ 79,000 | $ 171,000 | ||
| Common stock | $ 184,000 | $ 131,000 | $ 131,000 | $ 184,000 | |
| Retained earnings |
 ekkarill92 answered 1 year agoRelated SolutionsThe December 31, 20X8, balance sheets for Pint Corporation and its 70 percent-owned subsidiary Saloon Company...The December 31, 20X8, balance sheets for Pint Corporation and
its 70 percent-owned subsidiary Saloon Company contained the
following summarized amounts:
PINT CORPORATION AND SALOON COMPANY
Balance Sheets
December 31, 20X8
Pint
Corporation
Saloon
Company
Assets
Cash & Receivables
$
110,000
$
50,000
Inventory
151,000
114,000
Buildings & Equipment (net)
322,000
300,000
Investment in Saloon Company
232,500
Total Assets
$
815,500
$
464,000
Liabilities & Equity
Accounts Payable
$
103,500
$
73,000
Common Stock
190,000
141,000
Retained Earnings
522,000
250,000...
The December 31, 20X8, balance sheets for Pint Corporation and its 80 percent-owned subsidiary Saloon Company...The December 31, 20X8, balance sheets for Pint Corporation and
its 80 percent-owned subsidiary Saloon Company contained the
following summarized amounts:
PINT CORPORATION AND SALOON COMPANY
Balance Sheets
December 31, 20X8
Pint
Corporation
Saloon
Company
Assets
Cash & Receivables
$
99,000
$
42,000
Inventory
156,000
103,000
Buildings & Equipment (net)
313,000
288,000
Investment in Saloon Company
263,200
Total Assets
$
831,200
$
433,000
Liabilities & Equity
Accounts Payable
$
131,200
$
50,000
Common Stock
188,000
137,000
Retained Earnings
512,000
246,000...
The separate condensed balance sheets of Patrick Corporation and its wholly-owned subsidiary, Sean Corporation, are as...The separate condensed balance sheets of Patrick Corporation and
its wholly-owned subsidiary, Sean Corporation, are as follows:
BALANCE SHEETS December 31, 2020 Patrick Sean Cash $ 76,000 $
74,000 Accounts receivable (net) 144,000 22,000 Inventories 84,000
74,000 Plant and equipment (net) 622,000 266,000 Investment in Sean
456,000 - Total assets $ 1,382,000 $ 436,000 Accounts payable
160,000 88,000 Long-term debt 100,000 34,000 Common stock ($10 par)
326,000 50,000 Additional paid-in capital 14,000 Retained earnings
796,000 250,000 Total liabilities and shareholders'...
The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are...The separate condensed balance sheets of Patrick Corporation and
its wholly owned subsidiary, Sean Corporation, are as follows:
BALANCE SHEETS
December 31, 2017
Patrick
Sean
Cash
$
80,000
$
56,000
Accounts receivable (net)
140,000
40,000
Inventories
88,000
50,000
Plant and equipment (net)
624,000
260,000
Investment in Sean
474,000
-
Total assets
$
1,406,000
$
406,000
Accounts payable
178,000
98,000
Long-term debt
100,000
34,000
Common stock ($10 par)
338,000
80,000
Additional paid-in capital
8,000
Retained earnings
790,000
186,000
Total liabilities and...
The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are...The separate condensed balance sheets of Patrick Corporation and
its wholly owned subsidiary, Sean Corporation, are as follows:
BALANCE SHEETS
December 31, 2017
Patrick
Sean
Cash
$
70,000
$
56,000
Accounts receivable (net)
144,000
30,000
Inventories
100,000
42,000
Plant and equipment (net)
628,000
260,000
Investment in Sean
440,000
-
Total assets
$
1,382,000
$
388,000
Accounts payable
170,000
98,000
Long-term debt
102,000
22,000
Common stock ($10 par)
340,000
62,000
Additional paid-in capital
14,000
Retained earnings
770,000
192,000
Total liabilities and...
In preparing the consolidation worksheet for Pencil Corporation and its 60 percent–owned subsidiary, Stylus Company, the...In preparing the consolidation worksheet for Pencil Corporation
and its 60 percent–owned subsidiary, Stylus Company, the following
consolidation entries were proposed by Pencil's
bookkeeper:
Worksheet Entries
Debit
Credit
Cash
100,000
Accounts Payable
100,000
To eliminate the unpaid balance for intercorporate
inventory sales in 20X5.
Cost of Goods Sold
16,800
Income from Stylus Company
16,800
To eliminate unrealized inventory profits at
December 31, 20X5.
Income from Stylus Company
196,000
Sales
196,000
To eliminate intercompany sales for 20X5.
Pencil's bookkeeper recently graduated...
Here are the consolidated financial statements of Post Ranch Resort and its 70 percent owned subsidiary,...
Here are
the consolidated financial statements of Post Ranch Resort and its
70 percent owned subsidiary, Sandpearl, for the year ended December
31, 2020, plus supplementary information. Comparative balance
sheets are provided for 2019 and 2020.
Consolidated Balance Sheets
Consolidated Income Statement
December 31
2020
2019
Sales and other income
$250,000,000
Cash
$150,000
$113,000
Cost of sales
-170,000,000
Receivables
325,000
310,000
Operating expenses
-79,800,000
Inventories
1,400,000
1,450,000
Consolidated net income
200,000
Equity method investments
200,000
192,000
Noncontrolling interest in net...
Shown below are comparative balance sheets for Flint Corporation. Flint Corporation Comparative Balance Sheets December 31...Shown below are comparative balance sheets for Flint
Corporation.
Flint Corporation
Comparative Balance Sheets
December 31
Assets
2022
2021
Cash
$ 197,200
$ 63,800
Accounts receivable
255,200
220,400
Inventory
484,300
548,100
Land
232,000
290,000
Equipment
754,000
580,000
Accumulated depreciation—equipment
(191,400
)
(92,800
)
Total
$1,731,300
$1,609,500
Liabilities and Stockholders’ Equity
Accounts payable
$ 113,100
$ 124,700
Bonds payable
435,000
580,000
Common stock ($1 par)
626,400
504,600
Retained earnings
556,800
400,200
Total
$1,731,300
$1,609,500
Additional information:
1.
Net income for 2022...
Traynor Corporation reports its 40 percent investment in Victor Company on its December 31, 2020 balance...Traynor Corporation reports its 40 percent investment in Victor
Company on its December 31, 2020 balance sheet at $14,608,000.
Traynor acquired its interest in Victor on January 2, 2018 and uses
the equity method to account for the investment. Victor’s assets
and liabilities were fairly stated on January 2, 2018 except for
unreported technology (5-year life) of $4 million. Victor reported
net income of $1.2 million, $1.5 million, and $1.4 million, and
paid dividends of $200,000, $250,000, and $230,000 in...
The separate condensed balance sheets and income statements of Purl Corp. and its wholly owned subsidiary,...The separate condensed balance sheets and income statements of
Purl Corp. and its wholly owned subsidiary, Scott Corp., are as
follows:
BALANCE SHEETS
December 31, 20X0
Purl
Scott
Assets
Current assets
Cash
$80,000
$60,000
Accounts receivable (net)
$140,000
$25,000
Inventories
$90,000
$50,000
Total current assets
$310,000
$135,000
Property plant, and equipment (net)
$625,000
$280,000
Investment in Scott (equity method)
$390,000
----
Total assets
$1,325,000
$415,000...
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