1398450034-676254

Chapter 06 - Intercompany Inventory Transactions

6-1

CHAPTER 6

INTERCOMPANY INVENTORY TRANSACTIONS

ANSWERS TO QUESTIONS

Q6-1 All inventory transfers between related companies must be eliminated to avoid an overstatement of revenue and cost of goods sold in the consolidated income statement. In addition, when unrealized profits exist at the end of the period, the eliminations are needed to avoid overstating inventory and consolidated net income.

Q6-2 An inventory transfer at cost results in an overstatement of sales and cost of goods sold. While net income is not affected, gross profit ratios and other financial statement analysis may be substantially in error if appropriate eliminations are not made.

Q6-3 An upstream sale occurs when the parent purchases items from one or more subsidiaries. A downstream sale occurs when the sale is made by the parent to one or more subsidiaries. Knowledge of the direction of sale is important when there are unrealized profits so that the person preparing the consolidation worksheet will know whether to reduce consolidated net income assigned to the controlling interest by the full amount of the unrealized profit (downstream) or reduce consolidated income assigned to the controlling and noncontrolling interestson a proportionate basis (upstream).

Q6-4 As in all cases, the total amount of the unrealized profit must be eliminated in preparing the consolidated statements. When the profits are on the parent company's books, consolidated net income and income assigned to the controlling interest are reduced by the full amount of the unrealized profit.

Q6-5 Consolidated net income is reduced by the full amount of the unrealized profits. In the upstream sale, the unrealized profits are apportioned between the parent company shareholders and the noncontrolling shareholders. Thus, consolidated net income assigned to the controlling and noncontrolling interests is reduced by a pro rata portion of the unrealized profits.

Q6-6 Income assigned to the noncontrolling interest is affected when unrealized profits are recorded on the subsidiary's books as a result of an upstream sale. A downstream sale should have no effect on the income assigned to noncontrolling interest because the profits are on the books of the parent.

Q6-7 The basic eliminating entry needed when the item is resold before the end of the period is:

Sales XXXXXX

Cost of Goods Sold

XXXXXX


6-2

The debit to sales is based on the intercorporate sale price. This means that only the revenue recorded by the company ultimately selling to the nonaffiliate is to be included in the consolidated income statement. Cost of goods sold is credited for the amount paid by the purchaser on the intercorporate transfer, thereby permitting the cost of goods sold recorded by the initial owner to be reported in the consolidated statement. Q6-8 The basic eliminating entry needed when one or more of the items are not resold before the end of the period is:

Sales XXXXXX

Cost of Goods Sold

XXXXXX

Inventory

XXXXXX

The debit to sales is for the full amount of the transfer price. Inventory is credited for the unrealized profit at the end of the period and cost of goods sold is credited for the amount charged to cost of goods sold by the company making the intercompany sale.

Q6-9 Cost of goods sold is reported by the consolidated entity when inventory is sold to an external party. The amount reported as cost of goods sold is based on the amount paid for the inventory when it was produced or purchased from an external party. If inventory has been purchased by one company and sold to a related company, the cost of goods sold recorded on the intercorporate sale must be eliminated.

Q6-10 No adjustment to retained earnings is needed if the intercorporate sales have been made at cost or if all intercorporate sales have been resold to an external party in the same accounting period. If all of the intercorporate sales have not been resold by the end of the period, under the fully adjusted equity method, the parent defers unrealized profits in the investment in sub and income from sub accounts. This adjustment would be made to retained earnings under the modified equity method. However, regardless of the parent’s method for accounting for the investment, the amount of the noncontrolling interest is reduced by the NCI’s proportionate share of the unrealized profit associated with upstream sales.

Q6-11 A proportionate share of the realized retained earnings of the subsidiary are assigned to the noncontrolling interest. Any unrealized profits on upstream sales are deducted proportionately from the amount assigned to the noncontrolling interest. Unrealized profits on downstream sales do not affect the noncontrolling interest.

Q6-12 When inventory profits from a prior period intercompany transfer are realized in the current period, the profit is added to consolidated net income and to the income assigned to the shareholders of the company that made the intercompany sale. If the unrealized profits arise from a downstream sale, income assigned to the controlling interest will increase by the full amount of profit realized. When the profits arise from an upstream sale, income assigned to the controlling and noncontrolling interests will be increased proportionately in the period the profit is realized. Thus, knowledge of whether the profits resulted from an upstream or a downstream sale is imperative in assigning consolidated net income to the appropriate shareholder group.


6-3

Q6-13 Under the fully adjusted equity method, consolidated retained earnings is not affected directly by unrealized profits. Unrealized profits are deferred in the investment in sub and income from sub accounts on the parent’s books. Income from sub is closed out to retained earnings, so the deferral of unrealized profits indirectly affects retained earnings. As a result, the amount reported for consolidated retained earnings is always equal to the parent’s retained earnings.

Q6-14 Consolidated retained earnings are always equal to the parent’s retained earnings under the fully adjusted equity method. Since the parent company defers unrealized profits in the income from sub and investment in sub accounts and since income from sub is closed out to the parent’s retained earnings, the ending balance in consolidated retained earnings will reflect the reduction associated with the deferral of unrealized profits.

Q6-15* Sales between subsidiaries are treated in the same manner as upstream sales. Whenever the profits are on the books of one of the subsidiaries, the unrealized profits at the end of the period are eliminated and consolidated net income and income assigned to the controlling and noncontrolling interests is reduced.

Q6-16* When a company is acquired in a business combinationthe transactions occurring before the combination generally are regarded as transactions with unrelated parties and no adjustments or eliminations are needed. All transactions between the companies following the combination must be fully eliminated. SOLUTIONS TO CASES

C6-1 Measuring Cost of Goods Sold

a. While the rule covers only a part of the elimination needed, Charlie is correct in that the cost of goods sold recorded by the selling company must be eliminated to avoid overstating that caption in the consolidated income statement.

b. The rules will result in the proper consolidated totals if rule #1 is expanded to include a debit to sales and a credit to ending inventory for the amount of profit recorded by the company that sold to its affiliate.

c. The way in which the rule is stated makes it appear to be incorrect, but it is correct. The rule is appropriate in that the cost of goods sold recorded by the purchasing affiliate is equal to the cost of goods sold to the first owner plus the profit the first owner recorded on the sale. Eliminating these amounts therefore eliminates the appropriate amount of cost of goods sold. If an equal amount of sales is eliminated, the rule should result in proper consolidated financial statement totals.

d. The employee would be forced to look at the books of the selling affiliate and determine the difference between the intercorporate sale price and the price it paid to acquire or produce the items. If the items sold to affiliates are routinely produced and costs do not fluctuate greatly, it may be possible to use some form of gross profit ratio to estimate the amount of unrealized profit.


6-4

C6-2 Inventory Values and Intercompany Transfers

MEMO

To: President Water Products Corporation

From: , CPA

Re: Inventory Sale and Purchase of New Inventory

If Water Products holds only a small percent of the ownership of Plumbers Products and Growinkle Manufacturing, it should have no difficulty in reporting the desired results. This would not be the case if the two companies are subsidiaries of Water Products.

If both Plumbers Products and Growinkel are subsidiaries of Water Products, both the sale of inventory to Plumbers Supply and the purchase of inventory from Growinkle Manufacturing must be eliminated.In addition, the unrealized profit on any unsold inventory involved in these transfers must be eliminated in preparing the financial statements for the current period.

The consolidated income statement should include the same amount of income on the inventory sold to Plumbers Supply and resold during the year as would have been recorded if Water Products had sold the inventory directly to the purchaser. Any income recorded by Water Products on inventory not resold by Plumbers Supply must be eliminated.

Similarly, the consolidated income statement should include the same amount of income on the inventory purchased by Water Products and resold during the year as would have been recorded if Growinkle Manufacturing had sold the inventory directly to the purchaser. Any income recorded by Growinkle Manufacturing on inventory not resold by Water Products must be eliminated.

Consolidated net income may increase if Plumbers Supply is able to sell the inventory it purchased from Water Products at a higher price than would have been received by Water Products or if it is able to sell a larger number of units. The same can be said for the inventory purchased by Water Products from Growinkle Manufacturing. It is important to recognize that the transfer of inventory between Water Products and its subsidiaries does not in itself generate income for the consolidated entity.

An additional level of complexity may arise in this situation if Water Products uses the LIFO inventory method. It might, for example, be forced to carry over its LIFO cost basis on the old inventory sold to Plumbers Supply to the new inventory purchased from Growinkle Manufacturing since it was replaced within the accounting period.

Primary citation: ARB 51, Par. 6 (ASC 810)


6-5

C6-3 Intercorporate Inventory Transfers

MEMO

To: Treasurer Evert Corporation

From: , CPA

Re: Inventory Sale to Parent

This memo is prepared in response to your request for information on the appropriate treatment of intercompany inventory transfers in consolidated financial statements. The specific eliminating entries required in this case depend on the valuation assigned to the inventory at December 31, 20X2.

Frankle Company sold inventory with a carrying value of $240,000 to Evert for $180,000 on December 20, 20X2. Since the exchange price was well below Frankle’s cost, consideration should be given to whether the inventory should be reported at $180,000 or $240,000 in the consolidated statements at December 31, 20X2, under the lower-of-cost-or-market rule. While the value of the inventory apparently had fallen below Frankle’s carrying value, the accounting standards indicate no loss should be recognized when the evidence indicates that cost will be recovered with an approximately normal profit margin upon sale in the ordinary course of business. [ARB 43, Chapter 4, Par. 9; ASC 330]

We are told the management of Frankle considered the drop in prices to be temporary and Evert was able to sell the inventory for $70,000 more than the original amount paid by Frankle. It therefore seems appropriate for the consolidated entity to report the inventory at Frankle’s cost of $240,000 at December 31, 20X2.

In preparing the consolidated statements at December 31, 20X2 and 20X3, the effects of the intercompany transfer should be eliminated. [ARB 51, Par. 6; ASC 810]

The following eliminating entry is required at December 31, 20X2:

Sales 180,000

Inventory 60,000

Cost of Goods Sold

240,000

The above entry will increase the carrying value of the inventory to $240,000. Eliminating sales of $180,000 and cost of goods sold of $240,000 will increase consolidated net income by $60,000 and income assigned to the noncontrolling interestby$6,000 ($60,000 x 0.10). These changes will result in an increase in consolidated retained earnings and the amount assigned to the noncontrolling shareholders in the consolidated balance sheet by $54,000 and $6,000, respectively.


6-6

C6-3 (continued)

The following eliminating entry is required at December 31, 20X3:

Cost of Goods Sold 60,000

Investment in Sub

54,000

NCI in NA of Sub

6,000

The above entry will reduce consolidated net income by $60,000 and income assigned to the noncontrolling interest by $6,000 ($60,000 x .10). The credits to Investment in Sub and NCI in NA of Sub needed to bring the beginning balances into agreement with those reported at December 31, 20X2.

No eliminations are required for balances reported at December 31, 20X3, because the inventory has been sold to a nonaffiliate prior to year-end.

Primary citations: ARB 43, CH 4, Par. 9 (ASC 330) ARB 51, Par. 6 (ASC 810)

C6-4 Unrealized Inventory Profits

a. When the amount of unrealized inventory profits on the books of the subsidiary at the beginning of the period is greater than the amount at the end of the period, the income assigned to the noncontrolling interest for the period will exceed a pro rata portion of the reported net income of the subsidiary.

b. The subsidiary apparently had less unrealized inventory profit at the end of the period than it did at the start of the period. In addition, the parent must have had more unrealized profit on its books at the end of the period than it did at the beginning. The negative effect of the latter apparently offset the positive effect of the reduction in unrealized profits by the subsidiary.

c. The most likely reason is that a substantial amount of the parent company sales was made to its subsidiaries and the cost of goods sold on those items was eliminated in preparing the consolidated statements.

d. A loss was recorded by the seller on an intercompany sale of inventory to an affiliate and the purchaser continues to hold the inventory.


6-7

C6-5 Eliminating Inventory Transfers

a. If no intercompany sales are eliminated, the income statement may include overstated sales revenue and cost of goods sold. The net impact on income will depend upon whether there were more unrealized profits at the beginning or end of the year. If ReadyBuilding does not hold total ownership of the subsidiaries, the amount of income assigned to noncontrolling shareholders is likely to be incorrect as well.

Inventory, current assets and total assets, retained earnings, and stockholders' equity are likely to be overstated if inventories are sold to affiliates at a profit. If the companies pay income taxes on their individual earnings, the amount of income tax expense also will be overstated in the period in which unrealized profits are reported and understated in the period in which the profits are realized.

b. Because profit margins vary considerably, the amount of unrealized profit may vary considerably if uneven amounts of product are purchased by affiliates from period to period. ReadyBuilding needs to establish a formal system to monitor intercompany sales. Perhaps the best alternative would be to establish a separate series of accounts to be used solely for intercompany transfers. Alternatively, it may be possible to use unique shipping containers for intercompany sales or to specifically mark the containers in some way to identify the intercompany shipments at the time of receipt. The purchaser might then use a different type of inventory tag or mark these units in some way when the product is received and placed in inventory. Inventory count teams could then easily identify the product when inventories are taken.

c. A number of factors might be considered. The most important inventory system is the one used by the company making the intercompany purchase. When intercompany inventory purchases are bunched at the end of the year, the amount of unrealized profit included in ending inventory may be quite different under FIFO versus LIFO. If intercompany purchases are placed in a LIFO inventory base, inventories may be misstated for a period of years before the inventory is resold. Eliminating entries must be made each of the years until resale to avoid a misstatement of assets and equities. In those cases where the intercompany purchases are in high volume and the inventory turns over very quickly, a small amount of inventory left at the end of the period may be immaterial and of little concern. Typically, a parent will align inventory costing methods subsequent to a subsidiary acquisition to avoid problems caused by differences in accounting for the same items or types of items.

d. It may be necessary to start by looking at intercorporate cash receipts and disbursements to determine the extent of intercorporate sales. One or more months might be selected and all vouchers examined to establish the level of intercorporate sales and the profit margins recorded on the sales. For those products sold throughout the year, it may be possible to estimate for the year as a whole based on an examination of several months. Once total intercompany sales and profit margins have been estimated, the amount of unrealized profit at year end should be estimated. One approach would be to take a physical inventory of the specific product types which have been identified and attempt to trace back using the product identification numbers or shipping numbers to determine what portion of the inventory on hand was purchased from affiliates.


6-8

C6-6 Intercompany Profits and Transfers of Inventory

a. The intercompany transfers of Xerox (http://www.xerox.com) between segments are apparently relatively insignificant because they are not reported in the notes to the consolidated financial statements relating to segment reporting. For consolidation purposes, all significant intercompany accounts and transactions are eliminated.

b. Exxon Mobil (http://www.exxonmobil.com) prices intercompany transfers at estimated market prices. The amount of intercompany transfers is large. In the fiscal year ending December 31, 2009, Exxon Mobil reported eliminations of $302.6 billion of intersegment transfers, which does not include intercompany transfers within segments. This amount represents nearly 50 percent of total reported segment sales. For consolidation purposes, Exxon Mobil eliminates the effects of intercompany transactions.

c. Ford Motor Company (http://www.ford.com) intercompany transfers consist primarily of vehicles, parts, and components manufactured by the company and its subsidiaries, with a smaller amount of financial and other services included. The amount of intercompany transfers is relatively small in relation to sales to unaffiliated customers. The amount has been decreasing in recent years. The effects of intercompany transfers are eliminated in consolidation.

SOLUTIONS TO EXERCISES

E6-1 Multiple-Choice Questions on Intercompany Inventory Transfers [AICPA Adapted]

1. a

2. c

3. a

4. c

5. c Net assets reported

$320,000

Profit on intercompany sale $48,000

Proportion of inventory unsold at year end

($60,000 / $240,000) x 0.25

Unrealized profit at year end

(12,000)

Amount reported in consolidated statements

$308,000

6. c Inventory reported by Banks ($175,000 + $60,000)

$235,000

Inventory reported by Lamm

250,000

Total inventory reported

$485,000

Unrealized profit at year end

[$50,000 x ($60,000 / $200,000)]

(15,000)

Amount reported in consolidated statements

$470,000

http://www.xerox.com

http://www.exxonmobil.com

http://www.ford.com


6-9

E6-2 Multiple-Choice Questions on the Effects of Inventory Transfers [AICPA Adapted]

1. b Cost of goods sold reported by Park $ 800,000

Cost of goods sold reported by Small 700,000

Total cost of goods sold reported $1,500,000

Cost of goods sold reported by Park on

sale to Small ($500,000 x 0.40) (200,000)

Reduction of cost of goods sold reported by

Small for profit on intercompany sale

[($500,000 x 4 / 5) x 0.60] (240,000)

Cost of goods sold for consolidated entity $1,060,000

Note: Answer b in the actual CPA examination question was $1,100,000, requiring candidates to select the closest answer.

2. d $32,000 = ($200,000 + $140,000) –$308,000

3. b $6,000 = ($26,000 + $19,000) – $39,000

4. c $9,000 = Inventory held by Spin ($32,000 x 0.375)

$12,000

Unrealized profit on sale

[($30,000 + $25,000) –$52,000] (3,000)

Carrying cost of inventory for Power

$ 9,000

5. b 0.20 = $14,000 / [(Stockholders’ Equity $50,000) +(Patent $20,000)]

6. b 14 years = ($28,000 / [(28,000 - $20,000) / 4 years]

E6-3 Multiple Choice – Consolidated Income Statement

1. c

2. b

3. c Total income ($86,000 - $47,000) $39,000

Income assigned to noncontrolling

interest [0.40($86,000 - $60,000)] (10,400)

Consolidated net income assigned

to controlling interest $28,600


6-10

E6-4 Multiple-Choice Questions — Consolidated Balances

1. c

2. a Amount paid by Lorn Corporation

$120,000

Unrealized profit

(45,000)

Actual cost

$ 75,000

Portion sold

x 0.80

Cost of goods sold

$ 60,000

3. e Consolidated sales

$140,000

Cost of goods sold

(60,000)

Consolidated net income

$ 80,000

Income to Dresser’s noncontrolling

interest:

Sales $120,000

Reported cost of sales (75,000)

Report income $ 45,000

Portion realized x 0.80

Realized net income $ 36,000

Portion to Noncontrolling

Interest x 0.30

Income to noncontrolling

Interest

(10,800)

Income to controlling interest

$ 69,200

4. a Inventory reported by Lorn

$ 24,000

Unrealized profit ($45,000 x .20)

(9,000)

Ending inventory reported

$ 15,000

E6-5 Multiple-Choice Questions — Consolidated Income Statement

1. a $20,000 = $30,000 x [($48,000 - $16,000) / $48,000]

2. d Sales reported by Movie Productions Inc. $67,000

Cost of goods sold ($30,000 x 2/3) (20,000)

Consolidated net income $47,000

3. a $7,000 = [($67,000 - $32,000) x 0.20]


6-11

E6-6 Realized Profit on Intercompany Sale

a. Journal entries recorded by Nordway Corporation:

(1) Inventory 960,000

Cash (Accounts Payable)

960,000

(2) Cash (Accounts Receivable) 750,000

Sales

750,000

(3) Cost of Goods Sold 600,000

Inventory

600,000

b. Journal entries recorded by Olman Company:



750,000

(2) Cash (Accounts Receivable) 1,125,000

Sales

1,125,000


Inventory

750,000

c. Eliminating entry:

Sales 750,000

Cost of Goods Sold

750,000


6-12

E6-7 Sale of Inventory to Subsidiary

a. Journal entries recorded by Nordway Corporation:



960,000


Sales

750,000


Inventory

600,000

b. Journal entries recorded by Olman Company:



750,000


Sales

810,000


Inventory

540,000


Sales 750,000

Cost of Goods Sold

708,000

Inventory

42,000

Calculations

Total =

Re-Sold

+

Ending Inventory

Sales 750,000

540,000

210,000

COGS 600,000

432,000

168,000

Gross Profit 150,000

108,000

42,000

Gross Profit % 20%


6-13

E6-8 Inventory Transfer between Parent and Subsidiary

a. Karlow Corporation reported cost of goods sold of $820,000 ($82 x 10,000 desks) and Draw Company reported cost of goods sold of $658,000 ($94 x 7,000 desks).

b. Cost of goods sold for the consolidated entity is $574,000 ($82 x 7,000 desks).


Sales 940,000

Cost of Goods Sold

904,000

Inventory

36,000

Calculations

Total

=

Re-sold

+

Ending Inventory

Sales 940,000

658,000

282,000

COGS 820,000

574,000

246,000


84,000

36,000

Gross Profit % 12.77%

d. Eliminating entry:

Investment in Draw Company 36,000

Cost of Goods Sold

36,000

e. Eliminating entry:

Investment in Draw Company 21,600

NCI in NA of Draw Company 14,400

Cost of Goods Sold

36,000


6-14

E6-9 Income Statement Effects of Unrealized Profit

a. Sale price to Holiday Bakery per bag ($900,000 / 100,000) $ 9.00

Profit per bag [$9.00 - ($9.00 / 1.5)] (3.00)

Cost per bag $ 6.00

Bags sold by Holiday Bakery (100,000 - 20,000) x 80,000

Consolidated cost of goods sold $480,000

b. Sales 900,000

Cost of Goods Sold

840,000

Inventory ($3.00 x 20,000 bags)

60,000

Calculations

Total =

Re-sold +

Ending Inventory

Sales 900,000

720,000

180,000

COGS 600,000

480,000

120,000


240,000

60,000


Required Adjustment to Cost of Goods Sold:

Cost of goods sold — Farmco ($900,000 / 1.5) $ 600,000

Cost of goods sold — Holiday ($9.00 x 80,000 units) 720,000

$1,320,000

Consolidated cost of goods sold ($6.00 x 80,000 units) (480,000)

Required adjustment $ 840,000

c. Operating income of Holiday Bakery $400,000

Net income of Farmco Products 150,000

$550,000

Less: Unrealized inventory profits (60,000)


Less: Income assigned to noncontrolling interest

($150,000 - $60,000 unrealized profit) x 0.40 (36,000)

Income assigned to controlling interest $454,000

Alternate computation:

Operating income of Holiday Bakery

$400,000

Net income of Farmco Products $150,000

Unrealized profits ($3.00 x 20,000 units) (60,000)

Realized net income $ 90,000

Ownership held by Holiday Bakery x 0.60

54,000

Income assigned to controlling interest

$454,000


6-15

E6-10 Prior-Period Unrealized Inventory Profit

a. Cost per bag of flour ($9.00 / 1.5)

$ 6.00

Bags sold

x 20,000

Cost of goods sold from inventory held, January 1, 20X9 $120,000

b.

Investment in Farmco 36,000

NCI in NA of Farmco 24,000

Cost of Goods Sold

60,000

$60,000 = 20,000 bags x $3.00

c. Operating income of Holiday Bakery $300,000

Net income of Farmco Products 250,000

$550,000

Add: Inventory profits realized in 20X9 60,000


Less: Income assigned to noncontrolling shareholders

($250,000 + $60,000) x 0.40 (124,000)

Income assigned to controlling interest $486,000

Alternate computation:

Operating income of Holiday Bakery

$300,000

Net income of Farmco Products $250,000

Inventory profits realized in 20X9 60,000

Realized net income $310,000

Ownership held by Holiday Bakery x 0.60

186,000


$486,000


6-16

E6-11 Computation of Consolidated Income Statement Data

Downstream Transaction Calculations

Total

=

Re-sold

+

Ending

Inventory

Sales 30,000

24,000

6,000

COGS 20,000

16,000

4,000

Gross Profit 10,000

8,000

2,000


Worksheet Entry (not requested in problem) Sales

30,000


Inventory 2,000

Upstream Transaction Calculations

Total

=

Re-sold

+

Ending Inventory

Sales 80,000

60,000

20,000

COGS 50,000

37,500

12,500

Gross Profit 30,000

22,500

7,500


Worksheet Entry (not requested in problem) Sales

80,000


Inventory 7,500

a. Reported sales of Prem Company

$400,000

Reported sales of Cooper Company

200,000

$600,000

Intercompany sales by Prem Company in 20X5 $ 30,000

Intercompany sales by Cooper Company in 20X5 80,000

(110,000)

Sales reported on consolidated income statement

$490,000


6-17

E6-11 (continued)

b. Cost of goods sold reported by Prem Company

$250,000

Cost of goods sold reported by Cooper Company

120,000

$370,000

Adjustment due to intercompany sales

(100,500)

Consolidated cost of goods sold

$269,500

Adjustment to cost of goods sold:

CGS charged by Prem on sale to Cooper $ 20,000

CGS charged by Cooper ($30,000 - $6,000) 24,000

Total charged to CGS $ 44,000

CGS for consolidated entity

$20,000 x ($24,000 / $30,000) (16,000)

Required adjustment to CGS

$ 28,000

CGS charged by Cooper on sale to Prem $ 50,000

CGS charged by Prem ($80,000 - $20,000) 60,000

Total charged to CGS $110,000

CGS for consolidated entity

$50,000 x ($60,000 / $80,000) (37,500)

Required adjustment to CGS

72,500

Total adjustment required

$100,500

c. Reported net income of Cooper Company

$ 45,000

Unrealized profit on sale to Prem Company

$30,000 x ($20,000 / $80,000)

(7,500)

Realized net income

$ 37,500

Noncontrolling interest's share

x 0.40

Income assigned to noncontrolling interest

$ 15,000

d. Reported net income of Pem Company $107,000

Less: Income from Cooper (27,000)

$ 80,000

Net income of Cooper Company

45,000

Operating income

$125,000

Less:

Unrealized inventory profits of Prem

Company [$10,000 x ($6,000 / $30,000)] $ 2,000

Unrealized inventory profits of Copper

Company [$30,000 x ($20,000 / $80,000)] 7,500

Income assigned to noncontrolling

interest 15,000

(24,500)


$ 98,500


6-18

E6-12 Sale of Inventory at a Loss

a. Entries recorded by Trent Company:

Inventory 400,000

Cash

400,000

Purchase inventory.

Cash 300,000

Sales

300,000

Sale of inventory to Gord Corporation.


Inventory

400,000

Record cost of goods sold.

Entries recorded by Gord Corporation

Inventory 300,000

Cash

300,000

Purchase of inventory from Trent.

Cash 360,000

Sales

360,000

Sale of inventory to nonaffiliates.


Inventory

180,000

Record cost of goods sold: $180,000 = $300,000 x .60

b. Consolidated cost of goods sold for 20X8 should be reported as $240,000 ($400,000 x 0.60).

c. Operating income reported by Gord

$230,000

Net income reported by Trent $ 80,000

Unrealized loss on intercorporate sale

($400,000 - $300,000) x 0.40 40,000

120,000


$350,000

Income to assigned to noncontrolling interest ($120,000 x 0.25)

(30,000)


$320,000


6-19

E6-12 (continued)

d. Eliminating entry, December 31, 20X8:

Sales 300,000

Inventory 40,000

Cost of Goods Sold

340,000

Computation of cost of goods sold to be eliminated

Cost of goods sold recorded by Trent

$400,000

Cost of goods sold recorded by Gord

180,000

Total recorded

$580,000


(240,000)

Required elimination

$340,000

Intercompany Transaction Calculations

Total

=

Re-sold

+

Ending Inventory

Sales 300,000

180,000

120,000

COGS 400,000

240,000

160,000

Gross Profit (100,000)

(60,000)

(40,000)

Gross Profit % -33.33%


6-20

E6-13 Intercompany Sales

20X4 Calculations:

Total

=

Re-sold

+

Ending

Inventory

Sales 180,000

135,000

45,000

COGS 120,000

90,000

30,000

Gross Profit 60,000

45,000

15,000


Worksheet Entry (not required in problem) Sales 180,000


Inventory 15,000

20X5 Calculations:

20X5 Upstream

Total = Re-sold + Ending

Inventory

Sales 135,000

105,000

30,000

COGS 90,000

70,000

20,000

Gross Profit 45,000

35,000

10,000


20X5 Downstream

Total =

Re-sold +

Ending Inventory

Sales 280,000

170,000

110,000

COGS 140,000

85,000

55,000


85,000

55,000


Worksheet Elimination Entries (not required in problem):

Eliminate Upstream Transactions Sales

135,000


Inventory 10,000

Eliminate Downstream Transactions Sales

280,000


Inventory 55,000


6-21

Reversal of 20X4 Upstream Deferral Investment in Surg

10,500

NCI in NA of Surg

4,500


E6-13 (continued)

a. Consolidated net income for 20X4:

Operating income of Hollow Corporation

$160,000

Net income of Surg Corporation

90,000

$250,000

Less: Unrealized profit — Surg Corporation

(15,000)


$235,000

b. Inventory balance, December 31, 20X5:

Inventory reported by Hollow Corporation $30,000

Unrealized profit on books of Surg

Corporation

($135,000 - $90,000) x ($30,000/$135,000) (10,000)

$20,000

Inventory reported by Surg Corporation $110,000

Unrealized profit on books of Hollow

Corporation

($280,000 - $140,000) x ($110,000/$280,000) (55,000)

55,000

Inventory, December 31, 20X5

$75,000

c. Consolidated cost of goods sold for 20X5:

COGS on sale of inventory on hand January 1, 20X5

$45,000 x ($120,000 / $180,000)

$ 30,000

COGS on items purchased from Surg in 20X5

($135,000 - $30,000) x ($90,000 / $135,000)

70,000

COGS on items purchased from Hollow in 20X5

($280,000 - $110,000) x ($140,000 / $280,000)

85,000

Total cost of goods sold

$185,000


6-22

d. Income assigned to controlling interest:

Operating income of Hollow Corporation

$220,000

Net income of Surg Corporation

85,000

$305,000

Add: Inventory profit of prior year realized in 20X5

15,000

Less:

Unrealized inventory profit — Surg Corporation (10,000)

Unrealized inventory profit — Hollow Corporation (55,000)

Income to noncontrolling interest

($85,000 + $15,000 - $10,000) x 0.30

(27,000)


$228,000

E6-14 Consolidated Balance Sheet Worksheet

a.

Equity Method Entries on Doorst Corp.'s Books:

Investment in Hingle Co.

49,000

Income from Hingle Co.

49,000

Record Doorst Corp.'s 70% share of Hingle Co.'s 20X8 income

Cash

9,800

Investment in Hingle Co. 9,800

Record Doorst Corp.'s 70% share of Hingle Co.'s 20X8 dividend


10,000


10,000

Eliminate the deferred gross profit from downstream sales in 20X8


28,000


28,000

Eliminate the deferred gross profit from upstream sales in 20X8

Book Value Calculations:

NCI 30%

+

Doorst Corp. 70%

=

Common

Stock + Retained

Earnings

Original book value 103,200

240,800

150,000

194,000

+ Net Income 21,000

49,000

70,000

- Dividends (4,200)

(9,800)

(14,000)

Ending book value 120,000

280,000

150,000

250,000


6-23

Reversal/Deferred GP Calculations:

Total

=

Doorst Corp.'s

share

+

NCI's share

Downstream Reversal 0

0

0

Upstream Reversal 0

0

0

Downstream Deferred GP (10,000)

(10,000)

0

Upstream Deferred GP (40,000)

(28,000)

(12,000)

Total (50,000)

(38,000)

(12,000)

E6-14 (continued)

Basic elimination entry

Common stock

150,000

Original amount invested (100%)

Retained earnings

194,000

Beginning balance in retained earnings


11,000

Doorst’s % of NI - Deferred GP + Reversal

NCI in NI of Hingle Co.

9,000

NCI share of NI - Deferred GP + Reversal

Dividends declared

14,000

100% of Hingle Co.'s dividends declared


242,000

Net book value - Deferred GP + Reversal

NCI in NA of Hingle Co.

108,000

NCI share of BV - Deferred GP + Reversal

Deferral of this year's unrealized profits on inventory transfers

Sales

400,000


Inventory

50,000

20X8 Downstream Transactions

Total

=

Re-sold

+

Ending Inventory

Sales 100,000 75,000 25,000

COGS 60,000 45,000 15,000

Gross Profit 40,000 30,000 10,000



6-24

20X8 Upstream Transactions

Total

=

Re-sold

+

Ending

Inventory

Sales 300,000 205,000 95,000

COGS 173,684 118,684 55,000

Gross Profit 126,316 86,316 40,000


Investment in Income from

Hingle Co. Hingle Co.

Acquisition Price

240,800

70% Net Income

49,000 49,000

70% Net Income

9,800 70% Dividends

38,000 Deferred GP 38,000

Ending Balance

242,000 11,000

Ending Balance

242,000

Basic 11,000

0

0

E6-14 (continued)

b.

Elimination Entries

Doorst Corp.

Hingle Co. DR CR Consolidated

Balance Sheet

Cash and Receivables 98,000

40,000

138,000

Inventory 150,000

100,000

50,000

200,000

Buildings & Equipment (net) 310,000

280,000

590,000

Investment in Hingle Co. 242,000

242,000

0

Total Assets 800,000

420,000

0

292,000

928,000

Accounts Payable 70,000

20,000

90,000

Common Stock 200,000

150,000

150,000

200,000

Retained Earnings 530,000

250,000

194,000

14,000

530,000

11,000

350,000

9,000

400,000

NCI in NA of Hingle Co. 108,000

108,000

Total Liabilities & Equity 800,000

420,000

764,000

472,000

928,000


6-25

E6-15* Multiple Transfers between Affiliates

a. Entries recorded by Klon Corporation

Cash 150,000

Sales

150,000

Sale of inventory to Brant Company.


Inventory

100,000


Entries recorded by Brant Company

Inventory 150,000

Cash

150,000

Purchase of inventory from Klon.

Cash 150,000

Sales

150,000

Sale of inventory to Torkel Company.


Inventory

150,000


Entries recorded by Torkel Company

Inventory 150,000

Cash

150,000

Purchase of inventory from Brant.

Cash 120,000

Sales

120,000

Sale of inventory to nonaffiliates.


Inventory

90,000


b. Cost of goods sold for 20X8 should be reported as $60,000 [$90,000 x ($100,000 / $150,000)].

c. Inventory at December 31, 20X8, should be reported at $40,000 [$60,000 x ($100,000 / $150,000)].


6-26

E6-15* (continued)

d. Eliminating entry for inventory:

Sales 300,000

Cost of Goods Sold

280,000

Inventory

20,000

Computation of cost of goods sold to be eliminated

Cost of goods sold recorded by Klon

$100,000

Cost of goods sold recorded by Brant

150,000

Cost of goods sold recorded by Torkel

90,000

Total recorded

$340,000


(60,000)


$280,000

Computation of reduction to carrying value of inventory

Inventory reported by Torkel

$60,000

Inventory balance to be reported

(40,000)


$20,000


6-27

E6-16 Inventory Sales

a. Journal entries recorded by Spice Company:



150,000

Record purchases from nonaffiliate.


Sales

60,000

Record sale to Herb Corporation.


Inventory

40,000

Record cost of goods sold to Herb Corporation.

Journal entries recorded by Herb Corporation:



60,000

Record purchases from Spice Company.


Sales

90,000

Record sale of items to nonaffiliates.


Inventory

45,000


(4) Income from Herb 5,000

Investment in Herb

5,000

Eliminate unrealized gross profit on inventory purchases from Herb.

b. Eliminating entry:

Total

=

Re-sold

+

Ending Inventory

Sales 60,000

45,000

15,000

COGS 40,000

30,000

10,000

Gross Profit 20,000

15,000

5,000


Sales 60,000

Cost of Goods Sold

55,000

Inventory

5,000

Eliminate intercompany sale of inventory.


6-28

E6-17 Prior-Period Inventory Profits

a. 20X8 Sale:

Total

=

Re-sold

+

Ending

Inventory

Sales 180,000

170,000

30,000

COGS 120,000

113,333

20,000

Gross Profit 60,000

56,667

10,000


20X9 Sale:

Total

=

Re-sold

+

Ending Inventory

Sales 240,000

170,000

150,000

COGS 160,000

113,333

100,000

Gross Profit 80,000

56,667

50,000


Investment in Level Brothers 7,500

NCI in NA of Level Brothers 2,500

Cost of goods sold

10,000

Reversal of 20X8 gross profit deferral

Sales 240,000

Cost of Goods Sold

190,000

Inventory

50,000

Eliminate 20X9 intercompany sale of inventory.

b. 20X8

20X9

Reported net income of Level Brothers $350,000

$420,000

Unrealized profit, December 31, 20X8 (10,000)

10,000

Unrealized profit, December 31, 20X9

(50,000)


$380,000

Noncontrolling interest's share of ownership x 0.25

x 0.25

Income assigned to noncontrolling interest $ 85,000

$ 95,000


6-29

SOLUTIONS TO PROBLEMS

P6-18 Consolidated Income Statement Data

a. $180,000 = $550,000 + $450,000 - $820,000

b. January 1, 20X2: $25,000 = $75,000 - $50,000

December 31, 20X2: $15,000 = $180,000 + $210,000 - $375,000

c. Investment in Bitner 15,000

NCI in NA of Bitner 10,000

Cost of Goods Sold

25,000

Eliminate beginning inventory profit.

Sales 180,000

Cost of Goods Sold

165,000

Inventory

15,000


d. Reported net income of Bitner Company

$ 90,000

Prior-period profit realized in 20X2

25,000

Unrealized profit on 20X2 sales

(15,000)

Realized income

$100,000

Proportion held by noncontrolling interest

x 0.40


$ 40,000


6-30

P6-19 Unrealized Profit on Upstream Sales

20X2

Total

=

Re-sold

+

Ending

Inventory

Sales 200,000

130,000

70,000

COGS 160,000

104,000

56,000

Gross Profit 40,000

26,000

14,000


20X3

Total

=

Re-sold

+

Ending Inventory

Sales 175,000

70,000

105,000

COGS 140,000

56,000

84,000

Gross Profit 35,000

14,000

21,000


20X4

Total

=

Re-sold

+

Ending Inventory

Sales 225,000

105,000

120,000

COGS 180,000

84,000

96,000

Gross Profit 45,000

21,000

24,000


20X2

20X3

20X4

Operating income reported by Pacific $150,000

$240,000

$300,000

Net income reported by Carroll 100,000

90,000

160,000

$250,000

$330,000

$460,000

Inventory profit, December 31, 20X2

$70,000 - ($70,000 / 1.25) (14,000)

14,000


$105,000 - ($105,000 / 1.25)

(21,000)

21,000


$120,000 - ($120,000 / 1.25)

(24,000)


$323,000

$457,000

Income to noncontrolling interest:

($100,000 - $14,000) x 0.40 (34,400)

($90,000 + $14,000 - $21,000) x 0.40

(33,200)

($160,000 + $21,000 - $24,000) x 0.40

(62,800)

Income to controlling interest $201,600

$289,800

$394,200


6-31

P6-20 Net Income of Consolidated Entity

Operating income of Master for 20X5

$118,000

Net income of Crown for 20X5

65,000

$183,000

Add: Prior year profits realized by Master

25,000

Prior year profits realized by Crown

40,000

Less: Unrealized profits for 20X5 by Master

(14,000)

Unrealized profits for 20X5 by Crown

(55,000)

Amortization of differential

($45,000 / 15 years)

(3,000)

Consolidated net income, 20X5

$176,000

Less: Income to noncontrolling interest

($65,000 + $40,000 - $55,000 - $3,000) x 0.30

(14,100)

Income to controlling interest

$161,900

P6-21 Correction of Eliminating Entries

a. Proportion of intercompany inventory purchases resold during 20X5: Unrealized profit at year end

$ 12,000

Intercompany transfer price $140,000

Cost of inventory sold ($140,000 / 1.40) (100,000)

Total Profit

÷ 40,000

Proportion of intercompany sale held by

Bolger at year end

0.30

Proportion of intercompany purchases resold

by Bolger during 20X5 (1.00 - 0.30)

0.70

b. Eliminating entries, December 31, 20X5:

Intercompany Transactions

Total

=

Re-sold

+

Ending Inventory

Sales 140,000

98,000

42,000

COGS 100,000

70,000

30,000

Gross Profit 40,000

28,000

12,000



Accounts Receivable

80,000

Eliminate intercompany receivable/payable.

Sales 140,000

Cost of Goods Sold

128,000

Inventory

12,000



6-32

P6-22 Incomplete Data

a. Increase in fair value of buildings and equipment:

Consolidated total $ 680,000

Balance reported by Lever (400,000)

Balance reported by Tropic (240,000)

Increase in value $ 40,000

b. Accumulated depreciation for consolidated entity:

Accumulated depreciation reported by Lever $180,000

Accumulated depreciation reported by Tropic 110,000

Cumulative write-off of differential

($5,000 x 6 years) 30,000

Accumulated depreciation for consolidated entity $320,000

c. Amount paid by Lever to acquire ownership in Tropic:

Common stock outstanding $ 60,000

Retained earnings at acquisition 30,000

Total book value at acquisition $ 90,000

Increase in value of buildings and equipment 40,000

Fair value of net assets acquired $130,000

Proportion of ownership acquired x 0.75

Amount paid by Lever $ 97,500

d. Investment in Tropic Company stock reported at December 31, 20X6:

Tropic's common stock outstanding December 31, 20X6 $ 60,000

Tropic's retained earnings reported December 31, 20X6 112,000

Total book value $172,000

Proportion of ownership held by Lever x 0.75

Lever's share of net book value $129,000

Unamortized differential ($5,000 x 2 years) x 0.75 7,500

20X6 Gross Profit Deferral on Downstream Sale (3,000)

Investment in Tropic Company stock $133,500

e. Intercorporate sales of inventory in 20X6:

Sales reported by Lever $420,000

Sales reported by Tropic 260,000

Total sales $680,000

Sales reported in consolidated income statement (650,000)

Intercompany sales during 20X6 $ 30,000


6-33

P6-22 (continued)

f. Unrealized inventory profit, December 31, 20X6:

Inventory reported by Lever $125,000

Inventory reported by Tropic 90,000

Total inventory $215,000

Inventory reported in consolidated balance sheet (211,000)

Unrealized inventory profit, December 31, 20X6 $ 4,000

g. Eliminating entry to remove the effects of intercompany inventory sales during 20X6:

Sales 30,000

Cost of Goods Sold

26,000

Inventory

4,000

h. Unrealized inventory profit at January 1, 20X6:

Cost of goods sold reported by Lever $310,000

Cost of goods sold reported by Tropic 170,000

Reduction of cost of goods sold for intercompany

sales during 20X6 (26,000)

Adjusted cost of goods sold $454,000

Cost of goods sold reported in consolidated

income statement (445,000)

Additional adjustment to cost of goods sold

due to unrealized profit in beginning inventory $ 9,000

i. Accounts receivable reported by Lever at December 31, 20X6:

Accounts receivable reported for consolidated entity $145,000

Accounts receivable reported by Tropic (55,000)

Difference $ 90,000

Adjustment for intercompany receivable/payable:

Accounts payable reported by Lever $ 86,000

Accounts payable reported by Tropic 20,000

Total reported accounts payable $106,000

Accounts payable reported for consolidated

entity (89,000)

Adjustment for intercompany receivable/payable 17,000

Accounts receivable reported by Lever $107,000


6-34

P6-23 Eliminations for Upstream Sales a.

Equity Method Entries on Clean Air's Books:

Investment in Special Filter

32,000

Income from Special Filter

32,000

Record Clean Air's 80% share of Special Filter's 20X8 income


16,000


16,000

Reverse of the deffered gross profit from upstream sales in 20X7


12,000


12,000

Eliminate the deffered gross profit from upstream sales in 20X8


NCI 20%

+

Clean Air

80% =

Common

Stock + Retained

Earnings

Original book value

62,000

248,000

90,000

220,000

+ Net Income 8,000

32,000

40,000


280,000

90,000

260,000


Total

=

Clean Air's

share

+

NCI's share


0

Upstream Reversal 20,000

16,000

4,000

Downstream Deferred GP 0

0


(12,000)

(3,000)

Total 5,000

4,000

1,000

Basic elimination entry:

Common stock

90,000


Retained earnings

220,000

Beginning balance in RE

Income from Special Filter 36,000

Parent’s % of NI - Def. GP + Reversal

NCI in NI of Special Filter 9,000

NCI share of NI - Def. GP + Reversal


284,000

Net book value - Def. GP + Reversal

NCI in NA of Special Filter

71,000

NCI share of BV - Def. GP + Reversal


6-35

P6-23 (continued)

20X7 Upstream Transactions 20X8 Beg.

Inventory

Sales 60,000

COGS 40,000

Gross Profit 20,000



Total =

Re-sold +

Ending Inventory

Sales 150,000

105,000

45,000

COGS 100,000

70,000

30,000

Gross Profit 50,000

35,000

15,000


Reversal of last year's deferral:


16,000

NCI in NA of Special Filter

4,000

Cost of Goods Sold

20,000


Sales

150,000

Cost of Goods Sold

135,000

Inventory

15,000


6-36

P6-23 (continued)

b. Computation of consolidated net income and income assigned to controlling interest:

Operating income reported by Clean Air Products

($250,000 - $175,000 - $30,000) $ 45,000

Net income of Superior Filter

($200,000 - $140,000 - $20,000) 40,000

$ 85,000

Inventory profit realized from 20X7 20,000

Unrealized inventory profit for 20X8 (15,000)

Consolidated net income $ 90,000


($40,000 + $20,000 - $15,000) x 0.20 (9,000)

Income assigned to controlling interest $ 81,000

c. Noncontrolling interest, December 31, 20X8:

Common stock $ 90,000

Retained earnings ($220,000 + $40,000) 260,000

Less: Unrealized inventory profit (15,000)

$335,000

Proportion of stock held by noncontrolling interest x 0.20

Noncontrolling interest $ 67,000


6-37

P6-24 Multiple Inventory Transfers

a. Consolidated net income for 20X8:

Operating income of Ajax Corporation $80,000


($35,000 - $15,000) x ($7,000 / $35,000) (4,000)

$ 76,000

Net income of Beta Corporation $37,500

Profit realized from 20X7

($30,000 - $24,000) x ($10,000 / $30,000) 2,000


($72,000 - $63,000) x ($12,000 / $72,000) (1,500)

38,000

Net income of Cole Corporation $20,000

Profit realized from 20X7

($72,000 - $60,000) x ($18,000 / $72,000) 3,000


($45,000 - $27,000) x ($15,000 / $45,000) (6,000)

17,000


$131,000

b. Inventory balance, December 31, 20X8:

Balance per Beta Corporation $ 7,000

Less: Unrealized profit (4,000)

$ 3,000

Balance per Cole Corporation $12,000


10,500

Balance per Ajax Corporation $15,000


9,000

Inventory balance per consolidated statement

$22,500

c. Income assigned to noncontrolling interest in 20X8:

Realized income of Beta Corporation $38,000

Proportion of stock held by

noncontrolling interest x 0.30

$11,400

Realized income of Cole Corporation $17,000

Proportion of stock held by

noncontrolling interest x 0.10

1,700

Income to noncontrolling interest

$13,100


6-38

P6-25 Consolidation with Inventory Transfers and Other Comprehensive Income


Total

=

Re-sold +

Ending

Inventory

Sales 108,000

60,000

48,000

COGS 90,000

50,000

40,000

Gross Profit 18,000

10,000

8,000



Total

=

Re-sold +

Ending Inventory

Sales 45,000

27,000

18,000

COGS 30,000

18,000

12,000 Gross Profit 15,000

9,000

6,000



Total

=

Re-sold +

Ending Inventory

Sales 36,000

24,000

12,000

COGS 30,000

20,000

10,000

Gross Profit 6,000

4,000

2,000



Total

=

Re-sold +

Ending Inventory

Sales 48,000

6,000

42,000

COGS 32,000

4,000

28,000

Gross Profit 16,000

2,000

14,000



Tall Corp. Tall Corp. Beg. Balance

1,246,600

90% Net Income

81,000

81,000

90% Net Income

54,000

90% Dividends

18,000

90% of OCI Gain

20X4 Reversal

13,400

14,600

Deferred GP 14,600

13,400

20X4 Reversal Ending Balance

1,290,400

79,800

Ending Balance Reversal

13,400

1,285,800

Basic 79,800

18,000

OCI Entry

0

0


6-39

P6-25 (continued)

a. Balance in investment account at December 31, 20X5:

Proportionate share of Tall's net assets,

January 1 ([$1,400,000 x .90] – 8,000 – [6,000 x 0.90]) $1,246,600

Proportionate share of 20X5 net income

($90,000 x 0.90) 81,000

Proportionate share of other comprehensive

income for 20X5 ($20,000 x 0.90) 18,000

Proportionate share of dividends received

($60,000 x 0.90) (54,000)

Reversal of deferred gain from 20X4 downstream transaction 8,000 Reversal of deferred gain from 20X4 upstream transaction

($6,000 x .090) 5,400

Deferred gain from downstream transaction (2,000)

Proportionate share of deferred gain from upstream transaction ($14,000 x 0.90) (12,600)

Balance in investment account December 31, 20X5 $1,290,400

b. Investment income for 20X5:

Net income reported by Tall $90,000

Proportion of ownership held by Priority x 0.90

Priority’s share of reported income from Tall 81,000

Reversal of deferred gain from 20X4 downstream transaction 8,000 Reversal of deferred gain from 20X4 upstream transaction

($6,000 x 0.90) 5,400

Deferred gain from downstream transaction (2,000)

Proportionate share of deferred gain from upstream transaction ($14,000 x 0.90) (12,600)

Investment income for 20X5 $79,800

c. Income to noncontrolling interests for 20X5:

Net income reported by Tall $90,000

20X4 inventory profits realized in 20X5

($15,000 x 0.40) 6,000

20X5 unrealized inventory profits

$30,000 - [$30,000 x ($48,000 / $90,000)] (14,000)


Proportion of ownership held by noncontrolling interest x 0.10

Income to noncontrolling interest $ 8,200


6-40

P6-25 (continued)

d. Balance assigned to noncontrolling interest in consolidated balance sheet:

Net assets reported by Tall, January 1 $1,400,000

Net income for 20X5 90,000

Dividends paid in 20X5 (60,000)

Net assets reported, December 31, 20X5 $1,430,000

Unrealized inventory profits at

December 31, 20X5 (14,000)

Other comprehensive income in 20X5 20,000

Adjusted net assets, December 31, 20X5 $1,436,000

Proportion of ownership held by noncontrolling

interest x 0.10

Net assets assigned to noncontrolling interest $ 143,600

e. Inventory reported in consolidated balance sheet:

Inventory held by Priority $120,000


$106,000

Inventory held by Tall $100,000

Less: Unrealized profit

$6,000 - [$6,000 x ($24,000 / $36,000)] (2,000)

98,000

Inventory

$204,000

f. Consolidated net income for 20X5:

Operating income of Priority

$240,000

Net income of Tall

90,000

Total unadjusted income

$330,000

20X4 inventory profits realized in 20X5

($6,000 + $8,000)

14,000

Unrealized inventory profits on 20X5 sales

($14,000 + $2,000)

(16,000)


$328,000


6-41

g. Eliminating entries, December 31, 20X5


NCI 10%

+ Priority Corp. 90%

= Comm. Stock

+ Add.

Paid-In Capital

+ Retained Earnings

+

Acc. OCI

Original book value

140,000

1,260,000

400,000

200,000

790,000

10,000

+ Net Income 9,000

81,000

90,000

- Dividends (6,000) (54,000) (60,000) Ending book value 143,000

1,287,000

400,000

200,000

820,000

10,000

P6-25 (continued)


Total =

Priority Corp.'s share +

NCI's share

Downstream Reversal 8,000

8,000


5,400

600


(2,000)


(12,600)

(1,400)

Total (2,000)

(1,200)

(800)


6-42


Common stock

400,000


Additional paid-in capital

200,000

Beginning balance in APIC

Retained earnings

790,000


Accumulated OCI

10,000

Beginning balance in Acc. OCI

Income from Tall Corp.

79,800

PC.’s % of NI - Def. GP + Reversal

NCI in NI of Tall Corp.

8,200


Investment in Tall Corp.

1,285,800


NCI in NA of Tall Corp.

142,200


Other Comprehensive Income Entry:

OCI from Tall Corp.

18,000

OCI to the NCI

2,000


18,000


2,000



13,400


600

Cost of Goods Sold

14,000


Sales

126,000

Cost of Goods Sold

110,000

Inventory

16,000


6-43

P6-26 Multiple Inventory Transfers between Parent and Subsidiary

20X5 Downstream

Total

=

Re-sold

+

Ending

Inventory, 20X5

Sales 150,000

90,000

60,000

COGS 100,000

60,000

40,000

Gross Profit 50,000

30,000

20,000


20X5 Upstream

Total

=

Re-sold

+

Ending Inventory,

20X5

Sales 100,000

30,000

70,000

COGS 70,000

21,000

49,000

Gross Profit 30,000

9,000

21,000


Beg Inventory,

20X6

=

Re-sold

+

Ending Inventory,

20X6

Sales 70,000

50,000

20,000

COGS 49,000

35,000

14,000

Gross Profit 21,000

15,000

6,000


20X6 Downstream

Total

=

Re-sold

+

Ending Inventory,

20X6

Sales 60,000

54,000

6,000

COGS 40,000

36,000

4,000

Gross Profit 20,000

18,000

2,000



6-44

20X6 Upstream

Total

=

Re-sold

+

Ending

Inventory, 20X6

Sales 240,000

60,000

180,000

COGS 200,000

50,000

150,000

Gross Profit 40,000

10,000

30,000


a. Eliminating entries:

Investment in Slinky 20,000

Cost of goods sold

20,000

Eliminate beginning inventory profit of Proud Company.

Investment in Slinky 12,600

NCI in NA of Slinky 8,400

Cost of goods sold

15,000

Inventory

6,000

Eliminate beginning inventory profit of Slinky Company.

Sales 60,000

Cost of goods sold

58,000

Inventory

2,000

Eliminate intercompany sale of inventory by Proud Company.

Sales 240,000

Cost of goods sold

210,000

Inventory

30,000

Eliminate intercompany sale of inventory by Slinky Company.

b. Computation of cost of goods sold for consolidated entity:

Inventory produced by Proud in 20X5

($100,000 x 0.40) $ 40,000

Inventory produced by Slinky in 20X5

($70,000 x 0.50) 35,000

Inventory produced by Proud in 20X6

($40,000 x 0.90) 36,000

Inventory produced by Slinky in 20X6

($200,000 x 0.25) 50,000

Cost of goods sold reported in

consolidated income statement $161,000


6-45

P6-27 Consolidation following Inventory Transactions a. Equity Method Entries on Bell Co.'s Books: Investment in Troll Corp.

18,000

Income from Troll Corp.

18,000

Record Bell Co.'s 60% share of Troll Corp.'s 20X2 income

Cash

6,000

Investment in Troll Corp. 6,000 Record Bell Co.'s 60% share of Troll Corp.'s 20X2 dividend


6,500

Investment in Troll Corp.

6,500 Eliminate the deferred gross profit from downstream sales in 20X2


2,040


2,040 Reverse of the deferred gross profit from upstream sales in 20X1


2,520


2,520 Eliminate the deferred gross profit from upstream sales in 20X2

b.


NCI 40%

+ Bell Co. 60%

= Common

Stock + Retained

Earnings

Original book value

60,000

90,000

100,000

50,000

+ Net Income 12,000

18,000

30,000

- Dividends (4,000)

(6,000)

(10,000)


102,000

100,000

70,000


Total

=

Bell Co.'s share

+

NCI's share


0


2,040

1,360


(6,500)


(2,520)

(1,680)

Total (7,300)

(6,980)

(320)


6-46

P6-27 (continued)


Common stock

100,000


Retained earnings

50,000



11,020

Bell’s % of NI - Def. GP + Reversal

NCI in NI of Troll Corp.

11,680


Dividends declared

10,000

100% of Troll Corp.'s dividends


95,020


NCI in NA of Troll Corp.

67,680


Excess Value (Differential) Calculations: NCI 40% +

Bell Co. 60% =

Land

Beginning balance 7,200

10,800

18,000

Changes 0

0

0

Ending balance 7,200

10,800

18,000

Excess value (differential) reclassification entry:

Land

18,000


10,800

NCI in NA of Troll Corp. 7,200

Optional accumulated depreciation elimination entry

Accumulated depreciation

45,000

Building & equipment

45,000



2,040

NCI in NA of Troll Corp.

1,360

Cost of Goods Sold

3,400


Sales

63,000

Cost of Goods Sold

52,300

Inventory

10,700


6-47

P6-27 (continued)


Total

=

Re-sold

+

Ending

Inventory

Sales 28,000

15,000

13,000

COGS 14,000

7,500

6,500

Gross Profit 14,000

7,500

6,500



Total

=

Re-sold

+

Ending Inventory

Sales 42,500

34,000

8,500

COGS 25,500

20,400

5,100

Gross Profit 17,000

13,600

3,400



Total

=

Re-sold

+

Ending Inventory

Sales 35,000

24,500

10,500

COGS 21,000

14,700

6,300

Gross Profit 14,000

9,800

4,200



Troll Corp. Troll Corp. Beginning

Balance

98,760

60% Net Income

18,000

18,000

60% Net Income

6,000

60% Dividends

20X1 Reversal

2,040

9,020

Deferred GP 9,020

2,040

20X1 Reversal Ending Balance

103,780

11,020

Ending Balance Reversal

2,040

95,020

Basic 11,020

10,800

Excess Reclass.

0

0


6-48

P6-27 (continued)

c. Elimination Entries

Bell Co.

Troll Corp. DR CR Consolidated

Income Statement

Sales 200,000

120,000

63,000

257,000

Less: COGS (99,800) (61,000) 52,300

(105,100)

3,400

Less: Depreciation Expense (25,000) (15,000) (40,000)

Less: Interest Expense (6,000) (14,000) (20,000)

Income from Troll Corp. 11,020

11,020

0

Consolidated Net Income 80,220

30,000

74,020

55,700

91,900

NCI in Net Income 11,680

(11,680)

Controlling Interest in Net Income 80,220

30,000

85,700

55,700

80,220

Statement of Retained Earnings

Beginning Balance 227,960

50,000

50,000

227,960

Net Income 80,220

30,000

85,700

55,700

80,220

Less: Dividends Declared (40,000) (10,000) 10,000

(40,000)

Ending Balance 268,180

70,000

135,700

65,700

268,180

Balance Sheet

Cash and Accounts Receivable 69,400

51,200

120,600

Inventory 60,000

55,000

10,700

104,300

Land 40,000

30,000

18,000

88,000

Buildings & Equipment 520,000

350,000

45,000

825,000

Less: Accumulated Depreciation (175,000) (75,000) 45,000

(205,000)

Investment in Troll Corp. 103,780

2,040

95,020

0

10,800


411,200

65,040

161,520 932,900


41,200

110,000

Bonds Payable 80,000

200,000

280,000

Bonds Premium 1,200

1,200


100,000

100,000

200,000


70,000

135,700

65,700

268,180

NCI in NA of Troll Corp. 1,360

67,680

73,520

7,200


411,200

237,060

140,580 932,900


6-49

P6-28 Consolidation Worksheet

a.

Equity Method Entries on Crow Corp.'s Books:

Investment in West Co.

14,000

Income from West Co.

14,000

Record Crow Corp.'s 70% share of West Co.'s 20X9 income

Cash

3,500

Investment in West Co. 3,500

Record Crow Corp.'s 70% share of West Co.'s 20X9 dividend


15,000


15,000

Reverse of the deferred gross profit from downstream sales in 20X8


8,000


8,000



21,000


21,000

Reverse of the deferred gross profit from upstream sales in 20X8


17,500


17,500



NCI 30%

+

Crow Corp. 70%

=

Common

Stock + Retained

Earnings


280,000

150,000

250,000

+ Net Income 6,000

14,000

20,000

- Dividends (1,500)

(3,500)

(5,000)


290,500

150,000

265,000


6-50

P6-28 (continued)


Total

=

Crow

Corp.'s share

+

NCI's share


15,000


21,000

9,000


(8,000)


(17,500)

(7,500)

Total 12,000

10,500

1,500

Basic elimination entry Common stock

150,000

Original amount invested (100%) Retained earnings

250,000

Beginning balance in RE Income from West Co.

24,500

Crow’s % of NI - Def. GP + Reversal NCI in NI of West Co.

7,500

NCI share of NI - Def. GP + Reversal Dividends declared

5,000

100% of West Co.'s dividends Investment in West Co.

301,000

Net book value - Def. GP + Reversal NCI in NA of West Co.

126,000



Crow Corp. 70% =

Land + Goodwill Beginning balance 10,800

25,200

14,000

22,000

Changes 0

0

0

0


25,200

14,000

22,000

Excess value (differential) reclassification entry: Land

14,000

Goodwill 22,000


25,200

NCI in NA of West Co. 10,800

Reversal of last year's deferral: Investment in West Co.

36,000

NCI in NA of West Co.

9,000

Cost of Goods Sold

45,000

Deferral of this year's unrealized profits on inventory transfers Sales

152,000

Cost of Goods Sold

119,000

Inventory

33,000


6-51

P6-28 (continued)


Total

=

Re-sold

+

Ending

Inventory

Sales 90,000

70,000

20,000

COGS 54,000

42,000

12,000

Gross Profit 36,000

28,000

8,000



Total

=

Re-sold

+

Ending Inventory

Sales 62,000

0

62,000

COGS 37,000

0

37,000

Gross Profit 25,000

0

25,000



West Co. West Co. Beginning

Balance

269,200

70% Net Income

14,000

14,000

70% Net Income

3,500

70% Dividends

20X8 Reversal

36,000

25,500

Deferred GP 25,500

36,000

20X8 Reversal

Ending Balance

290,200

24,500

Ending Balance

Reversal

36,000

301,000

Basic 24,500

25,200

Excess Reclass.

0

0


6-52

P6-28 (continued)

b. Elimination Entries

Crow Corp. West Co. DR CR Consolidated

Income Statement

Sales 300,000

200,000

152,000

348,000

Less: COGS (200,000) (150,000) 119,000

(186,000)

45,000


Income from West Co. 24,500

24,500

0


20,000

176,500

164,000

92,000


(7,500)


20,000

184,000

164,000

84,500



250,000

250,000

532,000

Net Income 84,500

20,000

184,000

164,000

84,500


(35,000)


265,000

434,000

169,000

581,500

Balance Sheet

Cash and Receivable 81,300

85,000

166,300

Inventory 200,000

110,000

33,000

277,000

Land, Buildings, and Equipment (net) 270,000

250,000

14,000

534,000

Investment in West Co. 290,200

36,000

301,000

0

25,200

Goodwill 22,000

22,000


445,000

72,000 359,200 999,300


30,000

90,000


150,000

150,000

200,000


265,000

434,000

169,000

581,500

NCI in NA of West Co. 9,000

126,000

127,800

10,800


445,000

593,000 305,800 999,300

c. Retained earnings reconciliation, December 31, 20X9:

Retained earnings, Crow Corporation

$581,500

Retained earnings, West Company

265,000 Elimination of West’s beginning RE

(250,000)

Elimination debits in income statement

(184,000)

Elimination credits in income statement

164,000 Remove West’s dividends

5,000

Consolidated retained earnings

$581,500


6-53

P6-29 Computation of Consolidated Totals

a. Consolidated sales for 20X8:

Bunker

Harrison

Consol-

Corp.

Co.

idated

Sales reported $660,000

$510,000

Intercorporate sales (140,000)

(240,000)

Sales to nonaffiliates $520,000

$270,000

$790,000

b. Consolidated cost of goods sold:

Total sales reported $660,000

$510,000

Ratio of cost to sales price ÷ 1.4

÷ 1.2

Cost of goods sold $471,429

$425,000

Amount to be eliminated

(see entry) (128,000)

(232,000)

Cost of goods sold adjusted $343,429

$193,000

$536,429

Downstream:

Total

=

Re-sold

+

Ending Inventory

Sales 140,000

98,000

42,000

COGS 100,000

70,000

30,000

Gross Profit 40,000

28,000

12,000


Upstream:

Total

=

Re-sold

+

Ending Inventory

Sales 240,000

192,000

48,000

COGS 200,000

160,000

40,000

Gross Profit 40,000

32,000

8,000


Eliminating entries:

Sales 140,000

Cost of Goods Sold

128,000

Inventory

12,000

Elimination of sales by Bunker to Harrison:

Sales 240,000

Cost of Goods Sold

232,000

Inventory

8,000

Elimination of sales by Harrison to Bunker:


6-54

P6-29 (continued)

c. Operating income of Bunker Corporation (excluding

income from Harrison Company)

$70,000

Net income of Harrison Company

20,000

$90,000

Less:

Unrealized inventory profits of Bunker

(12,000)

Unrealized inventory profits of Harrison

(8,000)


$70,000

Less:


($20,000 - $8,000) x 0.20

(2,400)

Income to controlling interest 20X8

$67,600

d. Inventory balance in consolidated balance sheet:

Inventory reported by Bunker Corporation $48,000

Unrealized profits (8,000)

$40,000

Inventory reported by Harrison Company $42,000

Unrealized profits (12,000)

30,000

Inventory balance, December 31, 20X8

$70,000


6-55

P6-30 Intercompany Transfer of Inventory and Land a.

Equity Method Entries on Pine Corp.'s Books: Investment in Bock Co.

17,500

Income from Bock Co.

17,500

Record Pine Corp.'s 70% share of Bock Co.'s 20X3 income

Cash

10,500

Investment in Bock Co. 10,500 Record Pine Corp.'s 70% share of Bock Co.'s 20X3 dividend


6,300

Investment in Bock Co. 6,300 Record amortization of excess acquisition price


3,800

Investment in Bock Co.



6,300




5,600




NCI 30% +

Pine Corp.

70% =

Common

Stock + Retained

Earnings

Original book value

39,000

91,000

70,000

60,000

+ Net Income 7,500

17,500

25,000

- Dividends (4,500)

(10,500)

(15,000)


98,000

70,000

70,000


Total

=

Pine Corp.'s

share

+

NCI's share


0


6,300

2,700


(3,800)


(5,600)

(2,400)

Total (2,800)

(3,100)

300


6-56

P6-30 (continued)


Common stock

70,000


Retained earnings

60,000



14,400

Pine’s % of NI - Def. GP + Reversal

NCI in NI of Bock Co.

7,800


Dividends declared

15,000

100% of Bock Co.'s dividends


94,900


NCI in NA of Bock Co.

42,300



Pine Corp. 70% =

Buildings and Equipment + Patents

+

Acc. Depr.


32,200

20,000

28,000

(2,000)

Changes (2,700)

(6,300)

(7,000)

(2,000)


25,900

20,000

21,000

(4,000)

Amortized excess value reclassification entry:

Amortization expense

7,000

Depreciation expense

2,000


6,300

NCI in NI of Bock Co.

2,700


Buildings and Equipment

20,000

Patents 21,000

Accumulated depreciation 4,000

Investment in Bock Co. 25,900

NCI in NA of Bock Co. 11,100

Optional accumulated depreciation elimination entry:


50,000


50,000



6,300


2,700

Cost of Goods Sold

9,000


6-57

P6-30 (continued)

Deferral of this year's unrealized profits on inventory transfersInvestment in Bock Co.

4,900


2,100

Inventory

7,000

Deferral of this year's unrealized profits on inventory transfersSales

120,000

Cost of Goods Sold

108,200

Inventory

11,800


Bock Co. Bock Co. Beg. Balance

112,000

70% Net Income

17,500 17,500 70% Net Income

10,500 70% Dividends

6,300 Excess Val. Amort. 6,300 20X2 Reversal

6,300 9,400 Deferred GP 9,400 6,300 20X2 Reversal Ending Balance

109,600

8,100 Ending Balance Reversal

6,300 94,900 Basic 14,400

20X2 Deferred GP

4,900

25,900

Excess Reclass. 6,300

0

0

20X3 Downstream Transactions:

Total

=

Re-sold

+

Ending Inventory

Sales 30,000 22,400 7,600

COGS 15,000 11,200 3,800

Gross Profit 15,000 11,200 3,800


20X2 Upstream Transactions:

Ending Inventory, 20X2

=

Re-sold, 20X3

+

Ending Inventory,

20X3

Sales 48,000 27,000

21,000

COGS 32,000 18,000

14,000

Gross Profit 16,000 9,000

7,000



Total

=

Re-sold

+

Ending Inventory

Sales 90,000 66,000 24,000

COGS 60,000 44,000 16,000

Gross Profit 30,000 22,000 8,000



6-58

P6-30 (continued)


Pine Corp.

Bock Co. DR CR Consolidated

Income Statement

Sales 260,000

125,000

120,000

265,000

Other Income 13,600

13,600

Less: COGS (186,000) (79,800) 108,200

(148,600)

9,000

Less: Depreciation Expense (20,000) (15,000)

2,000

(37,000)

Less: Interest Expense (16,000) (5,200) (21,200)

Less: Amortization Expense

7,000

(7,000)

Income from Bock Co. 8,100

14,400

6,300

0


25,000

143,400

123,500

64,800


2,700

(5,100)

Controlling Interest in Net Income

59,700

25,000

151,200

126,200

59,700



60,000

60,000

127,900

Net Income 59,700

25,000

151,200

126,200

59,700


(30,000)


70,000

211,200

141,200

157,600

Balance Sheet

Cash and Accounts Receivable 15,400

21,600

37,000

Inventory 165,000

35,000

11,800

181,200

7,000

Land 80,000

40,000

120,000


260,000

20,000

50,000

570,000


4,000

(174,000)

Investment in Bock Co. 109,600

6,300

94,900

0

4,900

25,900

Patents 21,000

21,000


276,600

102,200

193,600

755,200


35,000

127,400


100,000

300,000

Bonds Premium 1,600

1,600


70,000

70,000

120,000


70,000

211,200

141,200

157,600

NCI in NA of Bock Co. 2,700

42,300

48,600

2,100

11,100


276,600

286,000

194,600

755,200


6-59

P7-30 (continued)

Note: Financial statements are not required.

Pine Corporation and Subsidiary Consolidated Balance Sheet

December 31, 20X3

Cash and Accounts Receivable

$ 37,000

Inventory

181,200

Land

120,000

Buildings and Equipment $570,000

Less: Accumulated Depreciation (174,000)

396,000

Patent

21,000

Total Assets

$755,200

Accounts Payable

$127,400

Bonds Payable $300,000

Bond Premium 1,600

301,600

Stockholders’ Equity:

Controlling Interest:

Common Stock $120,000


Total Controlling Interest $277,600

Noncontrolling Interest 48,600

Total Stockholders’ Equity

326,200

Total Liabilities and Stockholders' Equity

$755,200

Pine Corporation and Subsidiary Consolidated Income Statement Year Ended December 31, 20X3

Sales

$265,000

Other Income

13,600

Total Income

$278,600

Cost of Goods Sold $148,600

Depreciation Expense 37,000

Interest Expense 21,200

Amortization Expense 7,000

Total Expenses

(213,800)

Consolidated Net Income

$ 64,800

Income to Noncontrolling Interest

(5,100)

Income to Controlling Interest

$ 59,700


6-60

Pine Corporation and Subsidiary Consolidated Retained Earnings Statement

Year Ended December 31, 20X3

Retained Earnings, January 1, 20X3

$127,900

Income to Controlling Interest, 20X3

59,700

$187,600

Dividends Declared, 20X3

(30,000)

Retained Earnings, December 31, 20X3

$157,600

P6-31 Consolidation Using Financial Statement Data

a.

Equity Method Entries on Bower Corp.'s Books: Investment in Concerto Co.

21,000

Income from Concerto Co.

21,000 Record Bower Corp.'s 60% share of Concerto Co.'s 20X6 income

Cash

12,000

Investment in Concerto Co.

12,000 Record Bower Corp.'s 60% share of Concerto Co.'s 20X6 dividend


6,000

Investment in Concerto Co. 6,000 Record amortization of excess acquisition price


4,000


4,000 Reverse of the deferred gross profit from downstream sales in 20X5


2,000




4,800




5,400




6-61


NCI 40%

+

Bower Corp. 60%

=

Common

Stock

+ Retained

Earnings

Original book value

80,000

120,000

50,000

150,000

+ Net Income 14,000

21,000

35,000

- Dividends (8,000)

(12,000)

(20,000)


129,000

50,000

165,000

P6-31 (continued)


Total

=

Bower Corp.'s

share

+

NCI's share


4,000


4,800

3,200


(2,000)


(5,400)

(3,600)

Total 1,000

1,400

(400)


50,000


150,000

Beginning balance in RE Income from Concerto Co.

22,400

Bower’s % of NI - Def. GP + Reversal NCI in NI of Concerto Co.

13,600


20,000 100% of Concerto Co.'s dividends Investment in Concerto Co.

130,400

Net book value - Def. GP + Reversal NCI in NA of Concerto Co.

85,600



Bower Corp. 60% =

Goodwill


24,000

40,000

Changes (4,000)

(6,000)

(10,000)


18,000

30,000

Amortized excess value reclassification entry: Goodwill impairment loss

10,000


6,000

NCI in NI of Concerto Co.

4,000


6-62

Excess value (differential) reclassification entry: Goodwill

30,000


18,000

NCI in NA of Concerto Co. 12,000



25,000


25,000 P6-31 (continued)



8,800

NCI in NA of Concerto Co.

3,200

Cost of Goods Sold

12,000


Sales

112,000

Cost of Goods Sold

101,000

Inventory

11,000


Ending Inv., 20X5

Sales 14,000

COGS 10,000

Gross Profit 4,000



Total

=

Re-sold

+

Ending Inventory

Sales 22,000

15,000

7,000

COGS 15,714

10,714

5,000

Gross Profit 6,286

4,286

2,000



6-63


Ending Inv., 20X5

Sales 48,000

COGS 40,000

Gross Profit 8,000



Total

=

Re-sold

+

Ending Inventory

Sales 90,000

36,000

54,000

COGS 75,000

30,000

45,000

Gross Profit 15,000

6,000

9,000


P6-31 (continued)


Concerto Co. Concerto Co.

Beg. Balance

135,200

60% Net Income

21,000 21,000

60% Net Income


6,000 Excess Val. Amort. 6,000

20X5 Reversal

8,800 7,400 Deferred GP 7,400 8,800 20X5 Reversal

Ending Balance

139,600 16,400

Ending Balance

Reversal

8,800 130,400

Basic 22,400

18,000

Excess Reclass. 6,000

0

0


6-64


Bower Corp.

Concerto Co. DR CR Consolidated

Income Statement

Sales 400,000

200,000

112,000

488,000

Less: COGS (280,000) (120,000) 12,000

(287,000)

101,000

Less: Depreciation & Amort. Expense (25,000) (15,000) (40,000)

Less: Other Expenses (35,000) (30,000) (65,000)

Less: Goodwill Impairment Loss

10,000

(10,000)

Income from Concerto Co. 16,400

22,400

6,000

0


35,000

144,400

119,000

86,000


4,000

(9,600)


35,000

158,000

123,000

76,400



150,000

150,000

285,000

Net Income 76,400

35,000

158,000

123,000

76,400


(50,000)


165,000

308,000

143,000

311,400

Balance Sheet

Cash 26,800

35,000

61,800

Accounts Receivable 80,000

40,000

120,000

Inventory 120,000

90,000

11,000

199,000

Land 70,000

20,000

90,000


200,000

25,000

515,000


(225,000)

Investment in Concerto Co. 139,600

8,800

130,400

0

18,000

Goodwill 30,000

30,000


300,000

63,800

184,400

790,800


15,000

95,000


70,000

190,000


50,000

50,000

100,000


165,000

308,000

143,000

311,400

NCI in NA of Concerto Co. 3,200

85,600

94,400

12,000


300,000

361,200

240,600

790,800

P6-32 Intercorporate Transfers of Inventory and Equipment


6-65

a. Consolidated cost of goods sold for 20X9:

Amount reported by Foster Company

$593,000

Amount reported by Block Corporation

270,000

Adjustment for unrealized profit in

beginning inventory sold in 20X9

(15,000)

Adjustment for inventory purchased from

subsidiary and resold during 20X9:

CGS recorded by Foster ($30,000 x 0.60) $18,000

CGS recorded by Block 20,000

Total recorded $38,000

CGS based on Block's cost ($20,000 x 0.60) (12,000)

Required adjustment

(26,000)

Cost of goods sold

$822,000

b. Consolidated inventory balance:

Amount reported by Foster

$137,000

Amount reported by Block

130,000

Total inventory reported

$267,000

Unrealized profit in ending inventory held by

Foster [($30,000 - $20,000) x 0.40]

(4,000)

Consolidated balance

$263,000

c. Income assigned to noncontrolling interest:

Net income reported by Block Corporation

$70,000

Adjustment for realization of profit on inventory

sold to Foster in 20X8

15,000

Adjustment for unrealized profit on inventory sold

to Foster in 20X9

(4,000)

Realized net income of Block for 20X9

$81,000

Proportion of ownership held by noncontrolling interest

x 0.10


$ 8,100


6-66

P6-32 (continued)

d. Amount assigned to noncontrolling interest in consolidated balance sheet:

Block Corporation common stock outstanding $ 50,000

Block Corporation retained earnings, January 1, 20X9 165,000



Book value, December 31, 20X9 $265,000

Adjustment for unrealized profit on inventory

sold to Foster (4,000)

Realized book value of Block Corporation $261,000

Proportion of ownership held by noncontrolling

interest x 0.10

Balance assigned to noncontrolling interest $ 26,100

e. Consolidated retained earnings at December 31, 20X9:

Balance reported by Foster Company, January 1, 20X9 $235,000



Balance reported by Foster Company, December 31, 20X9 $375,900

f. Eliminating entries:


NCI 10%

+

Foster Co.

90% =

Common

Stock + Retained

Earnings

Original book value

21,500

193,500

50,000

165,000

+ Net Income 7,000

63,000

70,000

- Dividends (2,000)

(18,000)

(20,000)


238,500

50,000

215,000


6-67

P6-32 (continued)


Total

=

Foster

Co.'s share

+

NCI's share


0


13,500

1,500


0


(3,600)

(400)

Total 11,000

9,900

1,100


50,000


165,000

Beginning balance in RE Income from Block Corp.

72,900

Foster’s % of NI - Def. GP + Reversal NCI in NI of Block Corp.

8,100


20,000

100% of Block Corp.'s dividends Investment in Block Corp.

248,400

Net book value - Def. GP + Reversal NCI in NA of Block Corp.

27,600


Reversal of last year's deferral: Investment in Block Corp.

13,500

NCI in NA of Block Corp.

1,500

Cost of Goods Sold

15,000


30,000

Cost of Goods Sold

26,000

Inventory

4,000


Ending Inventory

Sales 75,000

COGS 60,000

Gross Profit 15,000



Total

=

Re-sold

+

Ending Inventory

Sales 30,000

18,000

12,000

COGS 20,000

12,000

8,000

Gross Profit 10,000

6,000

4,000



6-68

P6-32 (continued)


Block Corp. Block Corp.

Beg. Balance

180,000

90% Net Income

63,000 63,000

90% Net Income


20X8 Reversal

13,500 3,600 Deferred GP 3,600 13,500

20X8 Reversal

Ending Balance

234,900

72,900

Ending Balance

Reversal

13,500 248,400

Basic 72,900

0

0

g. Elimination Entries

Foster Co.

Block Corp. DR CR Consolidated

Income Statement

Sales 815,000

415,000

30,000

1,200,000

Other Income 26,000

15,000

41,000

Less: COGS (593,000) (270,000) 15,000

(822,000)

26,000



Income from Block Corp. 72,900

72,900

0


70,000

102,900

41,000

189,000


(8,100)


70,000

111,000

41,000

180,900



165,000

165,000

235,000

Net Income 180,900

70,000

111,000

41,000

180,900


(40,000)


215,000

276,000

61,000

375,900

Balance Sheet

Cash 187,000

57,400

244,400


90,000

170,000

Other Receivables 40,000

10,000

50,000

Inventory 137,000

130,000

4,000

263,000

Land 80,000

60,000

140,000


250,000

750,000

Less: Accumulated Depreciation (155,000) (75,000) (230,000)

Investment in Block Corp. 234,900

13,500

248,400

0

Total Assets 1,103,900

522,400

13,500

252,400

1,387,400


35,000

98,000

Other Payables 95,000

20,000

115,000


200,000

450,000

Bond Premium 2,400

2,400


50,000

50,000

210,000

Additional Paid-in Capital 110,000

110,000


215,000

276,000

61,000

375,900

NCI in NA of Block Corp. 1,500

27,600

26,100

Total Liabilities & Equity 1,103,900

522,400

327,500

88,600

1,387,400


6-69

P6-33 Consolidated Balance Sheet Worksheet [AICPA Adapted]


NCI 10% +

Pine Corp.

90% =

Common

Stock + Retained

Earnings


720,000

200,000

600,000

+ Net Income 10,100

90,900

101,000

- Dividends (100)

(900)

(1,000)


810,000

200,000

700,000


Total

=

Pine Corp.'s

share

+

NCI's share


0

Upstream Reversal 0

0

0

Downstream Deferred GP -3,000

-3,000

Upstream Deferred GP 0

0

0

Total (3,000)

(3,000)

0


Common stock

200,000


Retained earnings

600,000


Income from Slim Corp.

87,900

Pine’s % of NI - Def. GP + Reversal

NCI in NI of Slim Corp.

10,100


Dividends declared

1,000

100% of Slim Corp.'s dividends

Investment in Slim Corp.

807,000


NCI in NA of Slim Corp.

90,000



Pine Corp. 90% =

Goodwill


450,000

500,000

Changes 0

0

0


450,000

500,000


Goodwill

500,000

Investment in Slim Corp.

450,000

NCI in NA of Slim Corp. 50,000


6-70

P6-33 (continued)

Intercompany Transactions

Dividends Payable

900

Dividends Receivable

900

Accounts Payable

90,000

Accounts Receivable

90,000

Note Payable

100,000

Note Receivable

100,000

Interest Payable

5,000

Interest Receivable

5,000


Sales

300,000

Cost of Goods Sold

297,000

Inventory

3,000


Total

=

Re-sold

+

Ending Inventory

Sales 300,000

285,000

15,000

COGS 240,000

228,000

12,000

Gross Profit 60,000

57,000

3,000



Slim Corp. Slim Corp. Acquisition

Price

1,170,000

90% Net Income

90,900

90,900

90% Net Income

900

90% Dividends

3,000

Deferred GP 3,000

Ending Balance

1,257,000

87,900

Ending Balance

807,000

Basic 87,900

450,000

Excess Reclass.

0

0


6-71

P6-33 (continued)

Elimination Entries

Pine Corp.

Slim Corp. DR CR Consolidated

Balance Sheet

Cash 105,000

15,000

120,000

AR& Other Receivables 410,000

120,000

900

334,100

90,000

100,000

5,000

Merchandise Inventory 920,000

670,000

3,000

1,587,000

Plant & Equipment (net) 1,000,000

400,000

1,400,000

Investment in Slim Corp. 1,257,000

807,000

0

450,000

Goodwill 500,000

500,000


1,205,000

500,000

1,455,900

3,941,100

AP& Other Liabilities 140,000

305,000

900

249,100

90,000

100,000

5,000


200,000

200,000

500,000

Retained Earnings 3,052,000

700,000

600,000

1,000

3,052,000

87,900

297,000

10,100

300,000

NCI in NA of Slim Corp. 90,000

140,000

50,000


1,205,000

1,393,900

438,000

3,941,100


6-72

P6-34 Comprehensive Worksheet Problem

a.

Equity Method Entries on Randall Corp.'s Books:

Investment in Sharp Co.

320,000

Cash

320,000

Record the initial investment in Sharp Co.


32,000

Income from Sharp Co.

32,000

Record Randall Corp.'s 80% share of Sharp Co.'s 20X7 income

Cash

20,000

Investment in Sharp Co. 20,000

Record Randall Corp.'s 80% share of Sharp Co.'s 20X7 dividend


4,000


Record amortization of excess acquisition price


2,000


2,000

Reverse of the deferred gross profit from downstream sales in 20X6


3,000


3,000



6,400


6,400

Reverse of the deferred gross profit from upstream sales in 20X6


8,000


8,000



6-73

6-34 (continued)

b.


NCI 20%

+

Randall Corp. 80%

=

Common

Stock

+ Add. Paid-in Capital

+

Retained

Earnings

Original book value

67,000

268,000

100,000

20,000

215,000

+ Net Income 8,000

32,000

40,000

- Dividends (5,000)

(20,000)

(25,000)


280,000

100,000

20,000

230,000


Total

=

Randall Corp.'s

share

+

NCI's share


2,000


6,400

1,600


(3,000)


(8,000)

(2,000)

Total (3,000)

(2,600)

(400)


Common stock

100,000



20,000


Retained earnings

215,000



29,400

Randall’s % of NI - Def. GP + Reversal

NCI in NI of Sharp Co.

7,600


Dividends declared

25,000

100% of Sharp Co.'s dividends


277,400


NCI in NA of Sharp Co.

69,600



Randall Corp. 80% =

Buildings & equipment + Acc. Depr.


28,000

50,000

(15,000)

Changes (1,000)

(4,000)

(5,000)


24,000

50,000

(20,000)


6-74

P6-34 (continued)

Amortized excess value reclassification entry: Depreciation expense

5,000


4,000


1,000

Excess value (differential) reclassification entry: Buildings & equipment

50,000


20,000


NCI in NA of Sharp Co. 6,000

Eliminate intercompany accounts: Accounts payable

10,000

Accounts receivable

10,000

Optional accumulated depreciation elimination entry Accumulated depreciation

40,000


40,000

Reversal of last year's deferral: Investment in Sharp Co.

8,400


1,600

Cost of Goods Sold

10,000


57,000

Cost of Goods Sold

44,000

Inventory

13,000


Total

=

Re-sold

+

Ending Inventory

Sales 26,000

17,333

8,667

COGS 20,000

13,333

6,667

Gross Profit 6,000

4,000

2,000



Total

=

Re-sold

+

Ending Inventory

Sales 12,000

0

12,000

COGS 9,000

0

9,000

Gross Profit 3,000

0

3,000



6-75

P6-34 (continued)


Total

=

Re-sold

+

Ending

Inventory

Sales 60,000

36,000

24,000

COGS 40,000

24,000

16,000

Gross Profit 20,000

12,000

8,000



Total

=

Re-sold

+

Ending Inventory

Sales 45,000

15,000

30,000

COGS 30,000

10,000

20,000

Gross Profit 15,000

5,000

10,000



Sharp Co. Sharp Co.

Beginning Balance

287,600

80% Net Income

32,000

32,000

80% Net Income

20,000

80% Dividends

4,000

Excess Val. Amort. 4,000

20X6 Reversal

8,400

11,000

Deferred GP 11,000

8,400

20X6 Reversal

Ending Balance

293,000

25,400

Ending Balance

Reversal

8,400

277,400

Basic 29,400

24,000

Excess Reclass.

4,000

0

0


6-76

P6-34 (continued)

Elimination Entries

Randall Corp.

Sharp Co. DR CR Consolidated

Income Statement

Sales 500,000

250,000

57,000

693,000

Other Income 20,400

30,000

50,400

Less: COGS (416,000) (202,000) 10,000

(564,000)

44,000

Less: Depreciation & Amortization Exp. (30,000) (20,000)

5,000

(55,000)


Income from Sharp Co. 25,400

29,400

4,000

0


40,000

91,400

58,000

82,400


1,000

(6,600)


40,000

99,000

59,000

75,800



215,000

215,000

337,500

Net Income 75,800

40,000

99,000

59,000

75,800


(50,000)


230,000

314,000

84,000

363,300

Balance Sheet

Cash 130,300

10,000

140,300


70,000

10,000

140,000

Inventory 170,000

110,000

13,000

267,000


400,000

50,000

40,000

1,010,000


20,000

(410,000)


8,400

277,400

0

24,000


470,000

98,400

384,400

1,147,300


15,200

10,000

105,200


100,000

400,000

Bond Premium 4,800

4,800


100,000

100,000

200,000


20,000

0


230,000

314,000

84,000

363,300


69,600

74,000

6,000


470,000

445,600

159,600

1,147,300


6-77

P6-34 (continued)

d.

Randall Corporation and Subsidiary

Consolidated Balance Sheet December 31, 20X7

Cash

$ 140,300

Accounts Receivable

140,000

Inventory

267,000

Total Current Assets

$ 547,300

Buildings and Equipment

$1,010,000

Less: Accumulated Depreciation

(410,000)

600,000

Total Assets

$1,147,300

Accounts Payable

$ 105,200

Bonds Payable

$ 400,000

Bond Premium

4,800

404,800

Stockholders’ Equity:

Controlling Interest:

Common Stock

$ 200,000

Retained Earnings

363,300

Total Controlling Interest

$ 563,300

Noncontrolling Interest

74,000

Total Stockholders’ Equity

637,300

Total Liabilities and Stockholders' Equity

$1,147,300

Randall Corporation and Subsidiary Consolidated Income Statement Year Ended December 31, 20X7

Sales

$ 693,000

Other Income

50,400

$ 743,400

Cost of Goods Sold

$ 564,000

Depreciation and Amortization Expense

55,000

Other Expenses

42,000

(661,000)

Consolidated Net Income

$ 82,400

Income to Noncontrolling Interest

(6,600)

Income to Controlling Interest

$ 75,800


6-78

Randall Corporation and Subsidiary

Consolidated Statement of Retained Earnings Year Ended December 31, 20X7

Retained Earnings, January 1, 20X7

$ 337,500

Income to Controlling Interest, 20X7

75,800

$ 413,300

Dividends Declared, 20X7

(50,000)

Retained Earnings, December 31, 20X7

$ 363,300

P6-35 Comprehensive Consolidation Worksheet; Equity Method [AICPA Adapted]

Equity Method Entries on Fran Corp.'s Books:

Investment in Brey Inc.

750,000

Cash

750,000

Record the initial investment in Brey Inc.


190,000

Income from Brey Inc.

190,000

Record Fran Corp.'s 100% share of Brey Inc.'s 20X9 income

Cash

40,000

Investment in Brey Inc. 40,000

Record Fran Corp.'s 100% share of Brey Inc.'s 20X9 dividend


44,000


44,000



6-79


18,000


18,000


Fran Corp.

100% =

Common

Stock + Add. Paid-

in Capital +

Retained

Earnings


400,000 80,000 156,000

+ Net Income 190,000

190,000

- Dividends (40,000)

(40,000)


400,000 80,000 306,000


Total

=

Fran Corp.'s share


0

Upstream Reversal 0

0


0


(18,000)

Total (18,000)

(18,000)


6-80

P6-35 (continued)


Common stock

400,000



80,000


Retained earnings

156,000



172,000

Fran’s % of NI - Def. GP + Reversal

Dividends declared

40,000

100% of Brey Inc.'s dividends


768,000


Fran Corp. 100% =

Machinery

+ Acc. Depr. +

Goodwill


54,000

0

60,000

Changes (44,000)

(9,000)

(35,000)


54,000

(9,000)

25,000



9,000

Goodwill impairment loss

35,000


44,000


Machinery

54,000

Goodwill 25,000

Accumulated depreciation 9,000


Eliminate intercompany accounts:

Accounts payable

86,000

Accounts receivable

86,000


Sales

180,000

Cost of Goods Sold

162,000

Inventory

18,000


6-81

P6-35 (continued)


Total

=

Re-sold

+

Ending

Inventory

Sales 180,000

144,000

36,000

COGS 90,000

72,000

18,000

Gross Profit 90,000

72,000

18,000



Brey Inc. Brey Inc.

Acquisition Price

750,000

100% Net Income

190,000

190,000

100% Net Income

40,000

100% Dividends

44,000

Excess Val. Amort. 44,000

18,000

Deferred GP 18,000

Ending Balance

838,000

128,000

Ending Balance

768,000

Basic 172,000

70,000

Excess Reclass.

44,000

0

0


6-82

P6-35 (continued)

Note that in the 8th edition, the sale of the warehouse was an intercompany transaction and needed to be eliminated. We changed the problem in the 9th edition to assume that the sale was to a non-affiliated third party. Thus, the gain on the sale of the warehouse is not eliminated in this problem.

Elimination Entries

Fran Corp. Brey Inc. DR CR Consolidated

Income Statement

Net Sales 3,800,000

1,500,000

180,000

5,120,000

Gain on Sale of Warehouse 30,000

30,000

Less: COGS (2,360,000) (870,000) 162,000

(3,068,000)

Less: Operating Expenses (1,100,000) (440,000)

9,000

(1,549,000)

Less: Goodwill Impairment

35,000

(35,000)

Income from Brey Inc. 128,000

172,000

44,000

0

Net Income 498,000

190,000

396,000

206,000

498,000



156,000

156,000

440,000

Net Income 498,000

190,000

396,000

206,000

498,000

Less: Dividends Declared (40,000) 40,000

0


306,000

552,000

246,000

938,000

Balance Sheet

Cash 570,000

150,000

720,000

Accounts Receivable (net) 860,000

350,000

86,000

1,124,000

Inventories 1,060,000

410,000

18,000

1,452,000

Land, Plant, and Equipment 1,320,000

680,000

54,000

2,054,000


(589,000)


768,000

0

70,000

Goodwill 25,000

25,000


1,380,000

79,000

951,000

4,786,000

Accounts Payable & Accrued Expenses 1,340,000

594,000

86,000

1,848,000

Common Stock 1,700,000

400,000

400,000

1,700,000


80,000

80,000

300,000


306,000

552,000

246,000

938,000


1,380,000

1,118,000

246,000

4,786,000


6-83

P6-36A Fully Adjusted Equity Method

a. Adjusted trial balance:

Randall Corporation

Sharp Company

Item

Debit

Credit

Debit

Credit

Cash $ 130,300

$ 10,000


70,000

Inventory 170,000

110,000

Buildings and Equipment 600,000

400,000

Investment in Sharp

Company Stock 304,000


202,000

Depreciation and Amortization 30,000

20,000

Other Expenses 24,000

18,000

Dividends Declared 50,000

25,000

Accumulated Depreciation

$ 310,000

$120,000

Accounts Payable

100,000

15,200

Bonds Payable

300,000

100,000

Bond Premium

4,800

Common Stock

200,000

100,000

Additional Paid-In Capital

20,000

Retained Earnings

345,900

215,000

Sales

500,000

250,000

Other Income

20,400

30,000

Income from Subsidiary

28,000

$1,804,300

$1,804,300

$855,000

$855,000

b. Equity Method Entries on Randall Corp.'s Books:


32,000


32,000


Cash

20,000


Record Randall Corp.'s 80% share of Sharp Co.'s 20X7 dividend


4,000




6-84

P6-36A (continued)

c.


NCI 20%

+

Randall Corp. 80%

=

Commo

n Stock

+ Add. Paid-in Capital

+

Retained

Earning

s

Original book value

67,000

268,000

100,000 20,000 215,000

+ Net Income 8,000

32,000

40,000

- Dividends (5,000)

(20,000)

(25,000)


280,000

100,000 20,000 230,000


Total

=

Randall Corp.'s

share

+

NCI's share


2,000


6,400

1,600


(3,000)


(8,000)

(2,000)

Total (3,000)

(2,600)

(400)


Common stock

100,000



20,000


Retained earnings

215,000



32,000

Randall Corp.’s % of NI


7,600


Dividends declared

25,000

100% of Sharp Co.'s dividends


280,000

Net book value


69,600



Randall Corp. 80% =

Buildings & equipment + Acc. Depr.

Beginning balance 7,000 28,000 50,000 (15,000)

Changes (1,000) (4,000) (5,000)

Ending balance 6,000 24,000 50,000 (20,000)


6-85

P6-36A (continued)



5,000


4,000


1,000


Buildings & equipment 50,000


20,000


24,000


6,000


Accounts payable

10,000

Accounts receivable

10,000



40,000


40,000


Retained earnings

8,400


1,600

Cost of Goods Sold

10,000


Sales

57,000

Cost of Goods Sold

44,000

Inventory

13,000

(See Problem 6-34 for unrealized profit calculations.)


6-86

P6-36A (continued)

d. Elimination Entries

Randall Corp.


Income Statement

Sales 500,000

250,000

57,000

693,000

Other Income 20,400

30,000

50,400

Less: COGS (416,000) (202,000) 44,000

(564,000)

10,000

Less: Depreciation & Amortization Exp. (30,000) (20,000) 5,000

(55,000)


Income from Sharp Co. 28,000

32,000

4,000

0


40,000

94,000

58,000

82,400


1,000

(6,600)


40,000

101,600

59,000

75,800



215,000

215,000

337,500

8,400

Net Income 78,400

40,000

101,600

59,000

75,800


(50,000)


230,000

325,000

84,000

363,300

Balance Sheet

Cash 130,300

10,000

140,300


70,000

10,000

140,000

Inventory 170,000

110,000

13,000

267,000


400,000

50,000

40,000

1,010,000


20,000

(410,000)


280,000

0

24,000


470,000

90,000

387,000

1,147,300


15,200

10,000

105,200


100,000

400,000

Bond Premium 4,800

4,800


100,000

100,000

200,000


20,000

0


230,000

325,000

84,000

363,300


69,600

74,000

6,000


470,000

456,600

159,600

1,147,300


6-87

P6-37A Cost Method

a. Equity Method Entries on Randall Corp.'s Books:


20,000


20,000


b.

Investment elimination entry:

Common stock

100,000


20,000

Retained earnings

180,000


240,000


60,000

Dividend elimination entry:

Dividend Income

20,000


5,000

Dividends Declared

25,000


Buildings & equipment

50,000


40,000


10,000

Amortize differential from previous years:

Retained earnings

12,000


3,000


15,000

Amortize differential for 20X7

Depreciation Expense

5,000


5,000

Assign Sharp's undistributed income to NCI


1,600

Retained Earnings

7,000


8,600


6-88

P6-37A (continued)


Accounts payable

10,000

Accounts receivable

10,000



40,000


40,000


Retained Earnings

8,400


1,600

Cost of Goods Sold

10,000


Sales

57,000

Cost of Goods Sold

44,000

Inventory

13,000

(See Problem 6-34 for unrealized profit calculations.)


6-89

P6-37A (continued)

Elimination Entries

Randall Corp.


Income Statement

Sales 500,000

250,000

57,000

693,000

Other Income 20,400

30,000

50,400

Dividend Income 20,000

20,000

0

Less: COGS (416,000) (202,000) 10,000

(564,000)

44,000

Less: Depreciation & Amortization Exp. (30,000) (20,000)

5,000

(55,000)



60,000

82,000

54,000

82,400

NCI in Net Income of Sharp Co. 5,000

(6,600)

1,600


60,000

88,600

54,000

75,800



215,000

180,000

337,500

8,400

12,000

7,000

Net Income 50,400

60,000

88,600

54,000

75,800


(50,000)


250,000

296,000

79,000

363,300

Balance Sheet

Cash 130,300

10,000

140,300


70,000

10,000

140,000

Inventory 170,000

110,000

13,000

267,000


400,000

50,000

40,000

1,010,000


5,000

(410,000)

15,000


240,000

0

40,000


470,000

90,000

363,000

1,147,300


15,200

10,000

105,200


100,000

400,000

Bond Premium 4,800

4,800


100,000

100,000

200,000


20,000

0


250,000

296,000

79,000

363,300


60,000

74,000

3,000

10,000

8,600


490,000

430,600

157,600

1,147,300

Documents

1398450034-676254