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Consolidated Inc Statement Retained Earnings Consolidated Balance Sheet Parent Co Sub Co Debit Credit NCI Inventory, December 31 Other Current Assets...
Consolidated Inc StatementRetained EarningsConsolidated Balance Sheet
Parent CoSub CoDebitCreditNCI
Inventory, December 31
Other Current Assets
Investments in Sub Co
Land
Buildings and Equipment
Accumulated Depreciation
Goodwill
Current Liabilities
Bonds Payable
Other Long-Term Liabilities
Common Stock - P Co
Other Paid-in Capital - S Co
Retained Earnings - P Co
Common Stock - S Co
Other Paid-in Capital - P Co
Retained Earnings - S Co
Net Sales
Cost of Goods Sold
Operating Expenses
Subsidiary Income
Dividends Declared - P Co
Dividends Declared - S Co
Consolidated Net Income
NCI
Controlling Interests
Total NCI
Retained Earnings Controlling Int, 12.31
Power Corporation acquired 90% of Snyder Company's 1,250 shares of outstanding $100 par common stock on July 1, 2017 for $198,000. The excess of the current fair value of Snyder's identifiable net assets over the carrying amounts on July 1, 2017, was attributable as follows:
To inventories (fifo) $4,000
To equipment
(five year remaining life) 5,000
In addition, on July 1, 2017, Power acquired in the open market for $42,000, $39,000 of Snyder Company's 6% bonds payable at a yield of 5%. Interest is payable by Snyder each June 30 and
December 31.
Separate financial statements for Power Corporation and Snyder Company for the periods ended December 31, 2017, were as follows:
Power Snyder
(year ended (six months
12/31/2017) ended 12/31/2017)
Revenue:
Net Sales $960,150 $505,000
Interest Revenue 1,050
Income of Subsidiary 18,000 _______
$979,200 $505,000
Cost/Expenses/Losses:
Cost of Goods Sold $770,000 $384,000
Operating Expenses 121,140 98,450
Interest Expense 2,550
Gain on Sale of Equipment 5,000 _______
$896,140 $485,000
Net Income $83,060 $20,000
Retained Earnings, Beginning of Period $220,000 $50,000
Add: Net Income 83,060 20,000
Subtotal $303,060 $70,000
Less: Dividends Declared 36,000 9,000
Retained Earnings, End of Period $267,060 $61,000
Assets
Intercompany Accounts Receivable $100
Inventory (fifo) 254,835 $75,000
Investment in Snyder Stock 207,900
Investment in Snyder Bonds 41,790
Plant Assets 794,000 280,600
Accumulated Depreciation on Plant Assets (260,000) (30,000)
Other Assets 613,775 73,400
Total Assets $1,652,400 $399,000
Liabilities and Equity
Intercompany Accounts Payable $100
Bonds Payable $600,000 85,000
Other Liabilities 376,340 115,900
Common Stock, $100 par 360,000 125,000
Excess Paid In Capital 49,000 12,000
Retained Earnings 267,060 61,000
Total Liabilities and Equity $1,652,400 $399,000
Additional Information:
- During 2017 Power sold to Snyder inventory for $60,000 that had cost Power $40,000. Snyder held $18,000 of this purchase in inventory at the end of the year.
- During 2017 Snyder sold to Power inventory for $100,000 that had cost Snyder $80,000. Power held $20,000 of this purchase in inventory at the end of the year.
- On October 1, 2017, Power had sold to Snyder for $20,000 equipment having a carrying amount of $15,000 on that date. Snyder established a five-year remaining economic life, no residual value, and the straight-line method of depreciation for the equipment. Snyder includes depreciation expense in operating expenses.
- Goodwill was unimpaired as of December 31, 2017.
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