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parent: 90% stock ownership
2014
2015
selling price of merch
$ 37,600 $ 24,000 cost of sale to parent
$ 9,400 $ 6,000 $ 7,050 $ 1,500 32,800 (1,500)
31,300 Year 1
Year 2
3,130.0 1/1 RE
Add: Net Income
32,600 32,800 Less: Dividends
- - 12/31 RE
Reported Subsidiary NI
32,600 Reported Subsidiary NI
FV Adjustments:
FV Adjustments:
inventory
(2,350)
inventory
Unrealized Profit:
Unrealized Profit:
Add: PY Upstream
Add: PY Upstream
Less: CY Upstream
Less: CY Upstream
Adjusted Subsidiary NI
30,250 Adjusted Subsidiary NI
NCI %
10%
NCI %
NCI in Income
3,025 NCI in Income
32,800 (1,500)
$ 2,350 33,650 10%
3,365
Problem 6-5
PRUITT CORPORATION AND SUBSIDIARY
Consolidated Statement Workpaper
For the Year Ended December 31, 2021
Pruitt
Sedbrook
Eliminati
Corporation
Company
Dr.
INCOME STATEMENT
Sales
1,197,910 639,900 252,100 Dividend Income
31,680 - 31,680 Total revenue
1,229,590 639,900 Cost of goods sold:
Beginning inventory
166,200 131,500 Purchases
939,700 422,100 Cost of goods available
1,105,900 553,600 Less ending inventory
218,800 144,000 25,320 Cost of goods sold
887,100 409,600 Other expenses
196,800 163,700 Total Cost & Expense 1,083,900 573,300 Net/Consolidated income
145,690 66,600 Noncontrolling Interest in income Net income to retained earnings
145,690 66,600 309,100 RETAINED EARNINGS
1/1Retained Earnings:
Pruitt Corporation
603,400 22,590 Sedbrook Company
144,100 144,100 Net income from above
145,690 66,600 309,100 Dividends declared:
Pruitt Corporation
110,000 Sedbrook Company
35,200 12/31 Retained Earnings to Balance sheet
859,090 245,900 475,790 BALANCE SHEET
Cash
90,100 96,600 Accounts Receivable
243,100 134,500 Inventory
166,200 131,500 Investment in Sedbrook Company
622,890 - Other assets
548,900 481,200 Total assets
1,671,190 843,800
Accounts Payable
77,600 36,300 Other liabilities
119,800 46,900 Common Stock:
Pruitt Corporation
887,300 Sedbrook Company
597,600 597,600 Retained Earnings from above 859,090 245,900 475,790 1/1 Noncontrolling Interest 2,510 12/31 Noncontrolling Interest Total liabilities & equity
1,943,790 926,700 1,075,900
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1-
On 1/1/2019 Company P acquired 85% of Company S for 2500000 JD. On 30/11/2019 Company S declared dividends 170000 JD. Using cost method, P will record dividends income:
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QUESTION 3
Given below are the statements of financial position of H and its subsidiary of S as at 31st
December 2016
H
S
RM
RM
Ordinary shares of RMI each
600,000
350,000
Revaluation reserve
80,000
30,000
Retained profit
120,000
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RM45000
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PROBLEM ON INTERCOMPANY TRANSACTIONS
On January 2, 2008, BMO acquired 90% of the outstanding shares of MARCELINE Co. at book value. During 2008 and 2009, intercompany sales amounted to $2,000,000 and 4,000,000, respectively. MARCELINE Co. consistently recognized 25% mark-up based on sales while BMO had a 25% gross profit on cost. The inventories of the buying affiliate, which all came from inter-company transactions are as follows:
December 31, 2008
December 31, 2009
BMO
$240,000
$160,000
MARCELINE
$100,000
$40,000
On October 1, 2008, BMO purchased a piece of land costing $1,000,000 from MARCELINE for $1,500,000. On December 31, 2009, BMO sold this land to an unrelated party for $1,500,000. On the other hand, on July 1, 2009, BMO sold a used machine with a carrying value of $60,000 and remaining life of 3 years to MARCELINE CO. for $42,000.
Below are the Statement of Comprehensive Income for the two companies in 2009.
BMO CO.
MARCELINE CO.
Sales
$14,040,000…
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Consolidated Statements of Changes in Shareholders' Equity
($ in thousands)
Share Capital
Contributed Surplus
Retained Earnings
AOCI(1)
Total
Balance at January 31, 2015
$ 167,460
$ 2,831
$ 140,527
$ 18,465
$ 329,283
Net earnings for the year
—
–
69,779
–
69,779
Other comprehensive income (Note 12)
–
–
4,583
11,953
16,536
Other comprehensive income of equity investee
–
–
(15)
–
(15)
Comprehensive income
–
–
74,347
11,953
86,300
Equity settled share-based payments
–
124
–
–
124
Dividends (Note 19)
–
–
(58,210)
–
(58,210)
Issuance of common shares (Note 15)
450
(335)
–
–
115
450
(211)
(58,210)
–
(57,971)
Balance at January 31, 2016
$167,910
$ 2,620
$156,664
$ 30,418
$357,612
Balance at January 31, 2014
$ 166,069
$ 3,528
$ 145,762
$ 7,081
$ 322,440
Net earnings for the year
—
–
62,883
–
62,883
Other comprehensive income (Note 12)
–
–
(11,968)
11,384
(584)
Other comprehensive income of equity investee
–
–
30
–
30
Comprehensive income
–
–
50,945
11,384…
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of
$000
$000
$000
$000
Non-current assets
407
160
ion
Investment in Jerry (90,000)
128
Net Current Assets
125
90
660
250
Ordinary share ($1 each)
500
150
Reserves
60
Retained and earnings
100
40
General
60
160
100
660
250
Ben acquired the shareholding during 2021 when Jerry's retained earning account had a credit
balance of $30,000 and general reserves, $20,000
Required:
Prepare the consolidated Statement of Financial Position of the Ben Group as at December 31,
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What amount will be reported as a consolidated cost of goods sold?
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$200,000
$15,000
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150,000
12,000
2018
300,000
24,000
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Pop
Son
Income Statement
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$900,000
$600,000
Cost of sales
625,000
300,000
Expenses
225,000
150,000
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124,200
—
Balance Sheet
Inventory
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$ 80,000
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425,000
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500,000
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Market values at theend of Years 1 &2 are presented
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End of year 2
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IS19
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REQUIREMENTS: (
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Required information
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Unchanged
during the year
Common Stock
Jan. 1
60 million common shares were outstanding
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Basic EPS:
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$2.57
60
Shares
outstanding
0:00/1:23
720p
1X
CC O
Knowledge Check 01
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Basic EPS
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Question Two
The Whispering Cove plc has provided the following as at December 31, 2017
Cost of Sales
Closing Stock
10% Debenture
Debenture Interest
General Reserves
Retained Earnings
Goodwill
Ordinary Share Capital @ $2
10% Preference Share Capital @ $1
Sales Turnover
Debtors
Bank
Administrative Costs
Selling and Distribution Costs
Property Plant & Equipment
Motor Vehicle
Provision for Depreciation on Motor Vehicle
Creditors
Interim Ordinary Shares Dividend
Additional Details Provided
DR
700.000
210,000
20,000
20,000
200,000
60,000
122,000
139,000
600,000
500,000
CR
350,000
1. Prepa the lowing for year ending December 31, 2017 :
a) The Statement of Profit and Loss
40,000
b) The Statement of Change in Equity
NOTE: The Statement of Financial Position is NOT required
2. State three factors that may influence a company's decision
to pay dividends
400,000
400,000
1,300,000
8,000
5,000
2,576,000 2,576,000
40,000
38,000
1.
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with 5 years life. Using the complete equity
method, compute investment balance on
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Select one:
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b. 369200
C. 367800
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Current Attempt in Progress
These are two independent situations:
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2. Sheffield Inc. obtained significant influence over Kasey Corporation by buying 25% of Kasey's 30,500 outstanding shares of
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Prepare all the necessary journal entries for 2022 for Sheffield Inc. (Record journal entries in the order presented in the problem.
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Particulars
No. of equity shares
Profit after tax
Market Price Per Share
Compute the following:
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ii) Exchange Ratio
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$20,00,000
$20
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2,00,000
$10,00,000
$15
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Adj
Chance Company
* March
On April 10,
On May
AL
and
During 202A,
On Febru
On March
31, 20
3. Presented below are two independent situations.
Situation 1
cburgo aimsys anivzollot si 50S T
1261 C128 16 2500 blo
Pharoah Tables acquired 15% of the 4,800,000 shares of common stock of Robot Sofas at a total cost
of $7.80 per share on April 1, 2025. On August 8, Robot Sofas declared and paid a $267,000 cash
dividend. On December 31, Robot Sofas market price was $8.30 per share and the company reported
net income of $625,000 for the year.
Situation 2
On January 1, 2025, Coronado Company purchased 40% of Santos Corporation 525,000 outstanding
shares of common stock at a total cost of $14 per share. On October 25, Santos declared and paid a
cash dividend of $0.40 per share. On December 31, Santos reported a net income of $928,000 for the
year and the market price of its common stock was $15 per share.
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9.1
Calculate Left Ltd's share of profits in Right Ltd for the year ended 30 June 2023.
The following information is relevant to questions 9.1 and 9.2.
Left is a parent company that prepares consolidated financial statements. On 1 July 2021 Left
Ltd acquired 40% of the equity in Right Ltd for $220 000. At this date the equity in Right Ltd
consisted of:
Capital
$250 000
Revaluation reserve
$50 000
Retained profits
$150 000
Right Ltd carried its assets fair values with the exception of one item of plant & equipment
whose fair value was $20 000 greater than its carrying amount. The estimated useful life of this
item is 4 years. Summary of movements in the retained earnings of Right Ltd:
2022
2023
Profit after tax
Retained profits at start
Dividends
140 000
200 000
150 000
210 000
(80 000)
210 000
(100 000)
310 000
Retained profits at end
At 30 June 2022 there were unrealised profits before tax of $10 000 arising from inventory
transfers between the two entities.
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QUESTION ONE
The following financial information relates to Sporty Limited.
Statement of Financial Position as at 31 December 2018 and 2019
Ordinary share capital
Retained earnings
Property, plant and equipment
Investments
Debentures 12.5%
Inventory
Trade debtors
Prepaid expenses
Trade creditors
Bank overdraft
SARS (income tax)
Shareholders for dividends
Profit before interest and tax
Depreciation on equipment
Dividends received on investments
Interest on dividends
Income tax
Page 2 of 6
2019
R
400 000
55 000
230 000
165 000
20 000
124 000
37 000
Statement of comprehensive income for the year 31 December 2019
Note no. 1 for the year ended 31 December 2018 and 2019
Property, plant and equipment
Land and building at cost
Equipment at carrying value
25
000
21 000
5 000
30 000
Statement of changes in equity for the year ended 31 December 2019
Dividends on ordinary shares
2019 (R)
200 000
30 000
230 000
R
R
295 000
5 000
195 000
110 000
2018
60 000
120 000
28 500
1 500
42 500
25 000
R
60…
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CONSOLIDATED FINANCIAL STATEMENTS
INTERCOMPANY SALE OF FIXED ASSETS
PROBLEM J. Peter Corporation owns 80% of the outstanding stocks of Simon Company acquired at book value during
2021. Selected information from the accounts of both entities for 2021 and 2022 are as follows:
PETER Corporation
SIMON Company
2021
2022
2021
2022
P 900,000
P 450,000
(248,000)
(140,000)
(20,000)
Sales
P 800,000
P 500,000
Cost of goods sold
Operating expenses
Loss on sale of equipment
(480,000)
(180,000)
(30,000)
50,000
(540,000)
(190,000)
(20,000)
60,000
(310,000)
(145,000)
(10,000)
Gain on sale of land
65,000
75,000
Gain on sale of patent
10,000
12,000
5,000
7,000
Equipment
Accumulated depreciation
1,180,000
(320,000)
900,000
820,00
700,000
(260,000)
2,500,000
(200,000)
1,500,000
(170,000)
1,100,000
Land
2,800,000
520,000
(110,000)
Patent
560,000
480,000
420,000
Accumulated amortization
(80,000)
(90,000)
(70,000)
On April 30, 2021, PETER Corp sold equipment to SIMON Comp for P120,000. The said equipment was…
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Question 1
a) Given below are the statements of financial position of H and its subsidiary S as at 31
December 2021.
Ordinary shares of RM1.00 each
Share premium
Revaluation reserve
Retained profit
Liabilities
Inventory
Accounts receivable
H
RM
120,000 250,000
70,000 100,000
Fixed Assets - Land
300,000
Investment in S - 150,000 ordinary shares at cost 250,000
RM
Share premium 50,000
Revaluation reserve 15,000
Retained profit 20,000
S
RM
500,000 200,000
100,000
50,000
40,000
30,000
50,000 20,000
50,000 50,000
740,000 350,000
i. NCI is not measured at fair value.
H acquired 150,000 of the ordinary shares of S on 1 January 2017 when the balance in
S's accounts were:
740,000 350,000
Required:
Prepare the consolidated statement of financial position of H and of its subsidiary S as at 31
December 2021 where:
ii. NCI is measured at fair value where the fair value of S's shares on 1 January 2017 was
RM1.45 per share and on 31 December 2021 was RM1.80
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For the year ended December 31, the following results were given:
Dividend Paid Net Income
Parent Company P15,000 P30,200Subsidiary Company 4,000 9,400
Using the proportionate basis or partial goodwill method, compute the profit attributable to equity holders of parent (or controlling interestin consolidated net income) on December 31:A. P 26,600 C. P 36,000B. P32,090 D. P 44,100
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You have been provided with the following extracts of the financial statements of Provision
Ltd for the year ended 31 December 2018.
Statement of financial position for the year ended 31 December 2018
Non-current assets
Current assets
Inventories
Trade receivables
Cash
Total assets
Equity and Liabilities
Shareholders equity and
reserves
Contributed equity (ordinary
shares)
Retained income
Preference shares -
Non-current liabilities
Loan
Current liabilities
Trade payables
Dividends payable
Inland Revenue
Total equity and liabilities
Note
1
S
S
SSS
S
$
SSS
S
SSS
S
S
S
2018
328,000 S
498,000 S
170,000 S
90,000 $
62,000 $ 55,000
18,000 $
5,000
$
2017
80,000 $
48,000 $
12,000 $
20,000 $
286,000
170,000
110,000
418,000 $ 290,000
170,000 $
198,000 $
50,000 $
S
S
456,000
110,000
130,000
50,000
100,000
66,000
44,000
10,000
12,000
498,000 S 456,000
Extract from the statement of profit and loss for the year ended 31 December 2018:
Gross revenue
S
375,000
Cost of sales
$
217,000
S
158,000
Net…
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The Wondai Ltd Croup reports the following balances in its consolidated financial statements for
the year ending 30 June
Financial year
2018 $ 2017 $
Buildings
524,000
268,000
ACC Depr. - Buildings
190,000 143,000
Depr Expense - Buildings
50,000 23,000
On1 July 2017. the Wondai Ltd Group acquired 80%. the shares in Yallingup Ltd. which recorded
the following account balances at that date:
1 July 2017 $
Buildings
80,000
Acc Depr.- Buildings
32,000
During the year ended 30 June 2018, the Wondai Ltd Group disposed of buildings with a carrying.
amount of $63,000
Required: Calculate the amount of consolidated cash flows from investing activities in relation to
the purchase of buildings for the year ending 30 June 2018
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On 1/1/2019 P Company acquired 70% of S company for 400000 JD. On 31/12/2019 S company reported net income 41000 ID
and declared dividends 11000 JD. Positive differences is 35000 JD relating to assets with 5 years life. Using the complete equity
method investment balance on 31/12/2019 is:
Select one:
O a. 370600
Ob. 369200
O c. 367800
d. 366400
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SEE MORE QUESTIONS
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