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    Soal Kuis 2

    Uploaded by

    Rahajeng Santoso
    The document presents consolidated financial statements for Prout Company and its 80% owned subsidiary Sexton Company, including an income statement, statement of retained earnings, and balance sheet. It also shows journal entries related to the consolidation process and the sale of equipment from Sexton to Prout. The statements and entries consolidate the accounts of the two companies and eliminate the effect of transactions between the entities.

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    © All Rights Reserved
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    Soal Kuis 2

    Uploaded by

    Rahajeng Santoso
    42 views6 pages
    The document presents consolidated financial statements for Prout Company and its 80% owned subsidiary Sexton Company, including an income statement, statement of retained earnings, and balance sheet. It also shows journal entries related to the consolidation process and the sale of equipment from Sexton to Prout. The statements and entries consolidate the accounts of the two companies and eliminate the effect of transactions between the entities.

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    SOAL KUIS 2

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    The document presents consolidated financial statements for Prout Company and its 80% owned subsidiary Sexton Company, including an income statement, statement of retained earnings, and balance sheet. It also shows journal entries related to the consolidation process and the sale of equipment from Sexton to Prout. The statements and entries consolidate the accounts of the two companies and eliminate the effect of transactions between the entities.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    42 views6 pages

    Soal Kuis 2

    Uploaded by

    Rahajeng Santoso
    The document presents consolidated financial statements for Prout Company and its 80% owned subsidiary Sexton Company, including an income statement, statement of retained earnings, and balance sheet. It also shows journal entries related to the consolidation process and the sale of equipment from Sexton to Prout. The statements and entries consolidate the accounts of the two companies and eliminate the effect of transactions between the entities.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 6

    Rahajeng Simpony Santoso

    2301900265
    A.

    Eliminati Non  Consolidated 


    on Balances
    Controlli
    Entries
    ng
    interest

    Prout   Sexton   Debit  Credit


    Compan Compa
    y ny 

    Income
    Statement

    Sales  $ 1,475,0 $ $ $
    00 1,110,00 116,000  2,585,0
    0  00

    Equity in 116,000
    Sexton
    Company 

    Total 1,591,00 1,110,00 2,585,0


    Revenue  0  0  00

    Cost of goods 942,000  795,000  1,737,0


    sold  00

    Income tax 187,200  90,000  277,200


    expense 

    Other 145,000  90,000  8,000  227,000


    expenses 

    Total cost and 1,274,20 975,000  2,241,2


    expenses  0  00

    Consolidated 316,800  135,000  343,800


    income 

    Non- 27,000  (27,000


    controlling )
    interest in
    income
    ($135,000*20
    %) 

    Controlling $ 135,000 116,000  $ 8,000 $  27,000 $  316,800


    interest in Net 316,800 $ 
    income  $ 

    Statement of
    Retained
    Earnings

    Beginning $  1,380,000 $ $
    balance  1,040,000 $ 1,380,000
    1,040,000 

    Net income  316,800  135,000  116,000  8,000  27,000  316,800

    Dividend (120,000)  (100,000)  80,000  (20,000)  (120,000)


    declared 

    Ending $ 1,576,800 $ $ 7,000 $


    balance  1,075,000 $ 88,000 1,576,800
    1,156,000  $ 

    Balance Sheet

    Current assets  568,000  271,000  839,000

    Investment in Sexton 1,716,000  120,000  1,836,00


    Company  0

    Plant and equipment  1,972,000  830,000  40,000  2,842,000

    Accumulated depreciation  (375,000)  (290,000)  16,000  160,000  (809,000)

    Other assets  1,000,800  1,600,000  2,600,800

    Total assets  4,881,800  2,411,000  -  5,472,800


    Other liabilities  305,000  136,000  441,000

    Capital Stock  3,000,000  1,200,000  1,200,000  3,000,000

    Retained earnings  1,576,800  1,075,000  1,156,000  88,000  7,000  1,576,800

    Non-controlling 448,000  448,000  455,000


    interest in Net
    assets  
    [400,000+(1,040,000
    - 800,000)*20% 

    Total liabilities and 4,881,800  2,411,000  2,532,000  2,532,000  5,472,800


    equity 

    Selling Price of Fixed Assets $360,000

    Book Value of Assets [$400,000 x (15/25) 240,000

    Gain recognized on intercompany sale $120,000

    Excess Annual Depreciation ($120,000/15) $8,000

    Intercompany Sale of Equipment

    Cost Accumulated Depre. Carrying Value Remaining life Depre.

    Original Cost $400,000 $160,000 $240,000 15 years $16,000

    Intercompany 360,000 360,000 15 years 24,000

    Selling price

    Difference $40,000 $160,000 $120,000 $8,000

    1) Equity in subsidiary income 116,000


    Dividends declared (80)($100,000) 80,000
    Investment in sexton company 36,000

    To reverse the effect of parent company


    Entries during the year for subsidiary dividends and income

    2) Property and equity ($400,000-$360,000) 40,000


    Investment in sexton company 120,000
    Accumulated depreciation 160,000
    To reduce beginning consolidated retined earnings by amount of
    Unrealized profit at the beginning of the year and to restore the equipment to its book value on
    the date of intercompany sale

    3) Accumulated depreciation 16,000


    Depr expense 8,000
    Investment in sexton company 8,000

    To reverse amount of excess depreciation recorded during current year and recognize an
    equivalent amount of intercompany profit as realized

    4) Beginning retained earnings – sexton 1,040,000


    Common stocks – sexton 1,200,000
    Investment in sexton company
    ($1,716,000-$36,000+$120,000-$8,000) 1,792,000
    Noncontrolling interest
    [$400,000 + ($1,040,000 - $800,000) x 2] 448,000
    To eliminate investment account and create noncontrolling interest account
    1) Cash 300,000
    Acc. Depr. Fixed assets
    ($360,000/15 years x 2 years) 48,000
    Loss on sale of equipment 12,000
    Plant and equipment 360,000
    2) Investment in sexton company 104,000
    Loss on sale of equipment 12,000

    Gain on sale of equipment 92,000

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