$ 270 , 000 Concept introduction The consolidation process is the process of adding all the financial values of all the associate companies into one final financial report as of the parent company. To prepare: The equity method entry related to the investment.

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Answer 1

Question

Chapter 3, Problem 3.27P

a.

To determine

$270,000

Concept introduction

The consolidation process is the process of adding all the financial values of all the associate companies into one final financial report as of the parent company.

To prepare: The equity method entry related to the investment.

a.

Expert Solution

Answer to Problem 3.27P

The equity method entries are recorded.

Explanation of Solution

Equity method journal entries are as follows:

Particular	Dr $	Cr $
Investment in S corporation Dr.
Cash Cr.		$270,000
Being initial investment in S co recorded
Investment Dr.	$67,500
Income from S Cr.		$67,500
Being P co.’s 90% share of S co.’s 2008 income recorded
Cash Dr.	$18,000
Investment in S corporation Cr. Being P co.’s 90% share of S co.’s 2008 dividend recorded		$18,000

b.

To determine

Concept introduction

Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

To prepare: The consolidate worksheet of the final values by the company.

b.

Expert Solution

Answer to Problem 3.27P

The consolidate worksheet is provided and discussed.

Explanation of Solution

Book Value:

	NCI10%	+	P CO.90%	=	Common Stock	+	Retained Earnings
Original Book Value	30000		270000		200000		100000
+Net Income	7500		67500				75000
-Dividends	(2000)		(18000)				(20000)
Ending book Value	35500		319500		200000		155000

Consolidated worksheet:

Income statement	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Sales	800,000	250,000			1050,000
Less: COGS	(200,000)	(1,25,000)			(325,000)
Less: Depreciation	(50,000)	(10,000)			(60,000)
Less: Other Expenses	(2,25,000)	(40,000)			(265,000)
Income from S co.	65,000		65,000		0
Consolidated Net Income	3,92,000	75,000	65,000		4,00,000
NCI in Net Income			7,500		(7,500)
Controlling interest in net income	3,92,000	75,000	75,000		3,92,000

Statement of Retained Earnings	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Beginning Balance	2,25,000	1,00,000	1,00,000		2,25,000
Net Income	3,92,500	75,000	75,000		3,92,500
Less: Dividends Declared	(1,00,000)	(20,000)		20,000	(1,00,000)
Ending Balance	5,17,500	1,55,000	1,75,000	20,000	5,17,500

Balance Sheet	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Cash	158000	80000			238000
Account Receivables	165000	65000			230000
Inventory	200000	75000			275000
Investment In S Co.	319500			319500	0
Land	200000	100000			300000
Buildings & Equipment	700000	200000		10000	890000
Less: Accumulated Depreciation	(450000)	(20000)	10000		(460000)
Total Assets	1292500	500000	10000	329500	1473000

Account Payable	75000	60000			135000
Bonds Payable	200000	85000			285000
Common Stock	500000	200000	200000		500000
Retained Earnings	517500	155000	175000	20000	517500
NCI in NA S Co.				35500	35500
Total Liabilities	1292500	500000	10000	329500	1473000

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Peanut Company acquired 80 percent of Snoopy Company’s outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy’s net assets was equal to $375,000. Peanut uses the equity method to account for investments. The following trial balance summarizes the financial position and operations for Peanut and Snoopy as of December 31, 20X9: Peanut Company Snoopy Company Debit Credit Debit Credit Cash $ 269,000 $ 80,000 Accounts Receivable 193,000 85,000 Inventory 196,000 106,000 Investment in Snoopy Company 306,600 0 Land 211,000 85,000 Buildings and Equipment 702,000 194,000 Cost of Goods Sold 375,000 168,000 Depreciation Expense 45,000 20,000 Selling & Administrative Expense 214,000 25,750 Dividends Declared 221,000 49,000 Accumulated Depreciation $ 495,000 $ 60,000 Accounts Payable 66,000 60,000 Bonds Payable 137,000 46,750 Common Stock 496,000 195,000 Retained Earnings 631,800 145,000 Sales 833,000 306,000 Income from Snoopy Company 73,800 0 Total $ 2,732,600…

Peanut Company acquired 100 percent of Snoopy Company’s outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy’s net assets was equal to $300,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows: Peanut Company Snoopy Company Debit Credit Debit Credit Cash $ 130,000 $ 80,000 Accounts Receivable 165,000 65,000 Inventory 200,000 75,000 Investment in Snoopy Company 355,000 0 Land 200,000 100,000 Buildings and Equipment 700,000 200,000 Cost of Goods Sold 200,000 125,000 Depreciation Expense 50,000 10,000 Selling and Administrative Expense 225,000 40,000 Dividends Declared 100,000 20,000 Accumulated Depreciation $ 450,000 $ 20,000 Accounts Payable 75,000 60,000 Bonds Payable 200,000 85,000 Common Stock 500,000 200,000 Retained Earnings 225,000 100,000 Sales 800,000…

On January 1, 20X5, Peery Company acquired 100 percent of Standard Company's common shares at underlying book value. Peery uses the equity method in accounting for its ownership of Standard. On December 31, 20X5, the trial balances of the two companies are as follows: Item Peery Company Standard Company Debit Credit Debit Credit Current Assets $ 238,000 $ 95,000 Depreciable Assets 300,000 170,000 Investment in Standard Company 100,000 Other Expenses 90,000 70,000 Depreciation Expense 30,000 17,000 Dividends Declared 32,000 10,000 Accumulated Depreciation $ 120,000 $ 85,000 Current Liabilities 50,000 30,000 Long-Term Debt 120,000 50,000 Common Stock 100,000 50,000 Retained Earnings 175,000 35,000 Sales 200,000 112,000 Income from Standard Company 25,000 $ 790,000 $ 790,000 $ 362,000 $ 362,000 Required: Prepare the consolidation entries needed as of December 31, 20X5, to complete a…

Answer 2

Question

Chapter 3, Problem 3.27P

a.

To determine

$270,000

Concept introduction

The consolidation process is the process of adding all the financial values of all the associate companies into one final financial report as of the parent company.

To prepare: The equity method entry related to the investment.

a.

Expert Solution

Answer to Problem 3.27P

The equity method entries are recorded.

Explanation of Solution

Equity method journal entries are as follows:

Particular	Dr $	Cr $
Investment in S corporation Dr.
Cash Cr.		$270,000
Being initial investment in S co recorded
Investment Dr.	$67,500
Income from S Cr.		$67,500
Being P co.’s 90% share of S co.’s 2008 income recorded
Cash Dr.	$18,000
Investment in S corporation Cr. Being P co.’s 90% share of S co.’s 2008 dividend recorded		$18,000

b.

To determine

Concept introduction

Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

To prepare: The consolidate worksheet of the final values by the company.

b.

Expert Solution

Answer to Problem 3.27P

The consolidate worksheet is provided and discussed.

Explanation of Solution

Book Value:

	NCI10%	+	P CO.90%	=	Common Stock	+	Retained Earnings
Original Book Value	30000		270000		200000		100000
+Net Income	7500		67500				75000
-Dividends	(2000)		(18000)				(20000)
Ending book Value	35500		319500		200000		155000

Consolidated worksheet:

Income statement	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Sales	800,000	250,000			1050,000
Less: COGS	(200,000)	(1,25,000)			(325,000)
Less: Depreciation	(50,000)	(10,000)			(60,000)
Less: Other Expenses	(2,25,000)	(40,000)			(265,000)
Income from S co.	65,000		65,000		0
Consolidated Net Income	3,92,000	75,000	65,000		4,00,000
NCI in Net Income			7,500		(7,500)
Controlling interest in net income	3,92,000	75,000	75,000		3,92,000

Statement of Retained Earnings	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Beginning Balance	2,25,000	1,00,000	1,00,000		2,25,000
Net Income	3,92,500	75,000	75,000		3,92,500
Less: Dividends Declared	(1,00,000)	(20,000)		20,000	(1,00,000)
Ending Balance	5,17,500	1,55,000	1,75,000	20,000	5,17,500

Balance Sheet	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Cash	158000	80000			238000
Account Receivables	165000	65000			230000
Inventory	200000	75000			275000
Investment In S Co.	319500			319500	0
Land	200000	100000			300000
Buildings & Equipment	700000	200000		10000	890000
Less: Accumulated Depreciation	(450000)	(20000)	10000		(460000)
Total Assets	1292500	500000	10000	329500	1473000

Account Payable	75000	60000			135000
Bonds Payable	200000	85000			285000
Common Stock	500000	200000	200000		500000
Retained Earnings	517500	155000	175000	20000	517500
NCI in NA S Co.				35500	35500
Total Liabilities	1292500	500000	10000	329500	1473000

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Answer 3

Question

Chapter 3, Problem 3.27P

a.

To determine

$270,000

Concept introduction

The consolidation process is the process of adding all the financial values of all the associate companies into one final financial report as of the parent company.

To prepare: The equity method entry related to the investment.

a.

Expert Solution

Answer to Problem 3.27P

The equity method entries are recorded.

Explanation of Solution

Equity method journal entries are as follows:

Particular	Dr $	Cr $
Investment in S corporation Dr.
Cash Cr.		$270,000
Being initial investment in S co recorded
Investment Dr.	$67,500
Income from S Cr.		$67,500
Being P co.’s 90% share of S co.’s 2008 income recorded
Cash Dr.	$18,000
Investment in S corporation Cr. Being P co.’s 90% share of S co.’s 2008 dividend recorded		$18,000

b.

To determine

Concept introduction

Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

To prepare: The consolidate worksheet of the final values by the company.

b.

Expert Solution

Answer to Problem 3.27P

The consolidate worksheet is provided and discussed.

Explanation of Solution

Book Value:

	NCI10%	+	P CO.90%	=	Common Stock	+	Retained Earnings
Original Book Value	30000		270000		200000		100000
+Net Income	7500		67500				75000
-Dividends	(2000)		(18000)				(20000)
Ending book Value	35500		319500		200000		155000

Consolidated worksheet:

Income statement	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Sales	800,000	250,000			1050,000
Less: COGS	(200,000)	(1,25,000)			(325,000)
Less: Depreciation	(50,000)	(10,000)			(60,000)
Less: Other Expenses	(2,25,000)	(40,000)			(265,000)
Income from S co.	65,000		65,000		0
Consolidated Net Income	3,92,000	75,000	65,000		4,00,000
NCI in Net Income			7,500		(7,500)
Controlling interest in net income	3,92,000	75,000	75,000		3,92,000

Statement of Retained Earnings	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Beginning Balance	2,25,000	1,00,000	1,00,000		2,25,000
Net Income	3,92,500	75,000	75,000		3,92,500
Less: Dividends Declared	(1,00,000)	(20,000)		20,000	(1,00,000)
Ending Balance	5,17,500	1,55,000	1,75,000	20,000	5,17,500

Balance Sheet	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Cash	158000	80000			238000
Account Receivables	165000	65000			230000
Inventory	200000	75000			275000
Investment In S Co.	319500			319500	0
Land	200000	100000			300000
Buildings & Equipment	700000	200000		10000	890000
Less: Accumulated Depreciation	(450000)	(20000)	10000		(460000)
Total Assets	1292500	500000	10000	329500	1473000

Account Payable	75000	60000			135000
Bonds Payable	200000	85000			285000
Common Stock	500000	200000	200000		500000
Retained Earnings	517500	155000	175000	20000	517500
NCI in NA S Co.				35500	35500
Total Liabilities	1292500	500000	10000	329500	1473000

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Answer 4

Question

Chapter 3, Problem 3.27P

a.

To determine

$270,000

Concept introduction

The consolidation process is the process of adding all the financial values of all the associate companies into one final financial report as of the parent company.

To prepare: The equity method entry related to the investment.

a.

Expert Solution

Answer to Problem 3.27P

The equity method entries are recorded.

Explanation of Solution

Equity method journal entries are as follows:

Particular	Dr $	Cr $
Investment in S corporation Dr.
Cash Cr.		$270,000
Being initial investment in S co recorded
Investment Dr.	$67,500
Income from S Cr.		$67,500
Being P co.’s 90% share of S co.’s 2008 income recorded
Cash Dr.	$18,000
Investment in S corporation Cr. Being P co.’s 90% share of S co.’s 2008 dividend recorded		$18,000

b.

To determine

Concept introduction

Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

To prepare: The consolidate worksheet of the final values by the company.

b.

Expert Solution

Answer to Problem 3.27P

The consolidate worksheet is provided and discussed.

Explanation of Solution

Book Value:

	NCI10%	+	P CO.90%	=	Common Stock	+	Retained Earnings
Original Book Value	30000		270000		200000		100000
+Net Income	7500		67500				75000
-Dividends	(2000)		(18000)				(20000)
Ending book Value	35500		319500		200000		155000

Consolidated worksheet:

Income statement	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Sales	800,000	250,000			1050,000
Less: COGS	(200,000)	(1,25,000)			(325,000)
Less: Depreciation	(50,000)	(10,000)			(60,000)
Less: Other Expenses	(2,25,000)	(40,000)			(265,000)
Income from S co.	65,000		65,000		0
Consolidated Net Income	3,92,000	75,000	65,000		4,00,000
NCI in Net Income			7,500		(7,500)
Controlling interest in net income	3,92,000	75,000	75,000		3,92,000

Statement of Retained Earnings	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Beginning Balance	2,25,000	1,00,000	1,00,000		2,25,000
Net Income	3,92,500	75,000	75,000		3,92,500
Less: Dividends Declared	(1,00,000)	(20,000)		20,000	(1,00,000)
Ending Balance	5,17,500	1,55,000	1,75,000	20,000	5,17,500

Balance Sheet	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Cash	158000	80000			238000
Account Receivables	165000	65000			230000
Inventory	200000	75000			275000
Investment In S Co.	319500			319500	0
Land	200000	100000			300000
Buildings & Equipment	700000	200000		10000	890000
Less: Accumulated Depreciation	(450000)	(20000)	10000		(460000)
Total Assets	1292500	500000	10000	329500	1473000

Account Payable	75000	60000			135000
Bonds Payable	200000	85000			285000
Common Stock	500000	200000	200000		500000
Retained Earnings	517500	155000	175000	20000	517500
NCI in NA S Co.				35500	35500
Total Liabilities	1292500	500000	10000	329500	1473000

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Answer 5

Chapter 3, Problem 3.27P

a.

To determine

$270,000

Concept introduction

The consolidation process is the process of adding all the financial values of all the associate companies into one final financial report as of the parent company.

To prepare: The equity method entry related to the investment.

a.

Expert Solution

Answer to Problem 3.27P

The equity method entries are recorded.

Explanation of Solution

Equity method journal entries are as follows:

Particular	Dr $	Cr $
Investment in S corporation Dr.
Cash Cr.		$270,000
Being initial investment in S co recorded
Investment Dr.	$67,500
Income from S Cr.		$67,500
Being P co.’s 90% share of S co.’s 2008 income recorded
Cash Dr.	$18,000
Investment in S corporation Cr. Being P co.’s 90% share of S co.’s 2008 dividend recorded		$18,000

b.

To determine

Concept introduction

Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

To prepare: The consolidate worksheet of the final values by the company.

b.

Expert Solution

Answer to Problem 3.27P

The consolidate worksheet is provided and discussed.

Explanation of Solution

Book Value:

	NCI10%	+	P CO.90%	=	Common Stock	+	Retained Earnings
Original Book Value	30000		270000		200000		100000
+Net Income	7500		67500				75000
-Dividends	(2000)		(18000)				(20000)
Ending book Value	35500		319500		200000		155000

Consolidated worksheet:

Income statement	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Sales	800,000	250,000			1050,000
Less: COGS	(200,000)	(1,25,000)			(325,000)
Less: Depreciation	(50,000)	(10,000)			(60,000)
Less: Other Expenses	(2,25,000)	(40,000)			(265,000)
Income from S co.	65,000		65,000		0
Consolidated Net Income	3,92,000	75,000	65,000		4,00,000
NCI in Net Income			7,500		(7,500)
Controlling interest in net income	3,92,000	75,000	75,000		3,92,000

Statement of Retained Earnings	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Beginning Balance	2,25,000	1,00,000	1,00,000		2,25,000
Net Income	3,92,500	75,000	75,000		3,92,500
Less: Dividends Declared	(1,00,000)	(20,000)		20,000	(1,00,000)
Ending Balance	5,17,500	1,55,000	1,75,000	20,000	5,17,500

Balance Sheet	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Cash	158000	80000			238000
Account Receivables	165000	65000			230000
Inventory	200000	75000			275000
Investment In S Co.	319500			319500	0
Land	200000	100000			300000
Buildings & Equipment	700000	200000		10000	890000
Less: Accumulated Depreciation	(450000)	(20000)	10000		(460000)
Total Assets	1292500	500000	10000	329500	1473000

Account Payable	75000	60000			135000
Bonds Payable	200000	85000			285000
Common Stock	500000	200000	200000		500000
Retained Earnings	517500	155000	175000	20000	517500
NCI in NA S Co.				35500	35500
Total Liabilities	1292500	500000	10000	329500	1473000

Answer 6

Chapter 3, Problem 3.27P

a.

To determine

$270,000

Concept introduction

The consolidation process is the process of adding all the financial values of all the associate companies into one final financial report as of the parent company.

To prepare: The equity method entry related to the investment.

a.

Expert Solution

Answer to Problem 3.27P

The equity method entries are recorded.

Explanation of Solution

Equity method journal entries are as follows:

Particular	Dr $	Cr $
Investment in S corporation Dr.
Cash Cr.		$270,000
Being initial investment in S co recorded
Investment Dr.	$67,500
Income from S Cr.		$67,500
Being P co.’s 90% share of S co.’s 2008 income recorded
Cash Dr.	$18,000
Investment in S corporation Cr. Being P co.’s 90% share of S co.’s 2008 dividend recorded		$18,000

Answer 7

Chapter 3, Problem 3.27P

a.

To determine

$270,000

Concept introduction

The consolidation process is the process of adding all the financial values of all the associate companies into one final financial report as of the parent company.

To prepare: The equity method entry related to the investment.

Answer 8

a.

Expert Solution

Answer to Problem 3.27P

The equity method entries are recorded.

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Equity method journal entries are as follows:

Particular	Dr $	Cr $
Investment in S corporation Dr.
Cash Cr.		$270,000
Being initial investment in S co recorded
Investment Dr.	$67,500
Income from S Cr.		$67,500
Being P co.’s 90% share of S co.’s 2008 income recorded
Cash Dr.	$18,000
Investment in S corporation Cr. Being P co.’s 90% share of S co.’s 2008 dividend recorded		$18,000

Answer 13

b.

To determine

Concept introduction

Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

To prepare: The consolidate worksheet of the final values by the company.

b.

Expert Solution

Answer to Problem 3.27P

The consolidate worksheet is provided and discussed.

Explanation of Solution

Book Value:

	NCI10%	+	P CO.90%	=	Common Stock	+	Retained Earnings
Original Book Value	30000		270000		200000		100000
+Net Income	7500		67500				75000
-Dividends	(2000)		(18000)				(20000)
Ending book Value	35500		319500		200000		155000

Consolidated worksheet:

Income statement	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Sales	800,000	250,000			1050,000
Less: COGS	(200,000)	(1,25,000)			(325,000)
Less: Depreciation	(50,000)	(10,000)			(60,000)
Less: Other Expenses	(2,25,000)	(40,000)			(265,000)
Income from S co.	65,000		65,000		0
Consolidated Net Income	3,92,000	75,000	65,000		4,00,000
NCI in Net Income			7,500		(7,500)
Controlling interest in net income	3,92,000	75,000	75,000		3,92,000

Statement of Retained Earnings	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Beginning Balance	2,25,000	1,00,000	1,00,000		2,25,000
Net Income	3,92,500	75,000	75,000		3,92,500
Less: Dividends Declared	(1,00,000)	(20,000)		20,000	(1,00,000)
Ending Balance	5,17,500	1,55,000	1,75,000	20,000	5,17,500

Balance Sheet	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Cash	158000	80000			238000
Account Receivables	165000	65000			230000
Inventory	200000	75000			275000
Investment In S Co.	319500			319500	0
Land	200000	100000			300000
Buildings & Equipment	700000	200000		10000	890000
Less: Accumulated Depreciation	(450000)	(20000)	10000		(460000)
Total Assets	1292500	500000	10000	329500	1473000

Account Payable	75000	60000			135000
Bonds Payable	200000	85000			285000
Common Stock	500000	200000	200000		500000
Retained Earnings	517500	155000	175000	20000	517500
NCI in NA S Co.				35500	35500
Total Liabilities	1292500	500000	10000	329500	1473000

Answer 14

b.

To determine

Concept introduction

Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

To prepare: The consolidate worksheet of the final values by the company.

Answer 15

b.

Expert Solution

Answer to Problem 3.27P

The consolidate worksheet is provided and discussed.

Answer 16

b.

Expert Solution

Answer 17

b.

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Book Value:

	NCI10%	+	P CO.90%	=	Common Stock	+	Retained Earnings
Original Book Value	30000		270000		200000		100000
+Net Income	7500		67500				75000
-Dividends	(2000)		(18000)				(20000)
Ending book Value	35500		319500		200000		155000

Consolidated worksheet:

Income statement	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Sales	800,000	250,000			1050,000
Less: COGS	(200,000)	(1,25,000)			(325,000)
Less: Depreciation	(50,000)	(10,000)			(60,000)
Less: Other Expenses	(2,25,000)	(40,000)			(265,000)
Income from S co.	65,000		65,000		0
Consolidated Net Income	3,92,000	75,000	65,000		4,00,000
NCI in Net Income			7,500		(7,500)
Controlling interest in net income	3,92,000	75,000	75,000		3,92,000

Statement of Retained Earnings	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Beginning Balance	2,25,000	1,00,000	1,00,000		2,25,000
Net Income	3,92,500	75,000	75,000		3,92,500
Less: Dividends Declared	(1,00,000)	(20,000)		20,000	(1,00,000)
Ending Balance	5,17,500	1,55,000	1,75,000	20,000	5,17,500

Balance Sheet	P co($)	S co($)	Eliminate DR ($)	EliminateCR ($)	consolidated($)
Cash	158000	80000			238000
Account Receivables	165000	65000			230000
Inventory	200000	75000			275000
Investment In S Co.	319500			319500	0
Land	200000	100000			300000
Buildings & Equipment	700000	200000		10000	890000
Less: Accumulated Depreciation	(450000)	(20000)	10000		(460000)
Total Assets	1292500	500000	10000	329500	1473000

Account Payable	75000	60000			135000
Bonds Payable	200000	85000			285000
Common Stock	500000	200000	200000		500000
Retained Earnings	517500	155000	175000	20000	517500
NCI in NA S Co.				35500	35500
Total Liabilities	1292500	500000	10000	329500	1473000

Answer 20

Ch. 3 - What is the basic idea underlying the preparation...Ch. 3 - How might consolidated statements help an investor...Ch. 3 - Prob. 3.3Q Ch. 3 - Prob. 3.4Q Ch. 3 - Prob. 3.5Q Ch. 3 - Prob. 3.6Q Ch. 3 - Prob. 3.7Q Ch. 3 - Prob. 3.8Q Ch. 3 - Prob. 3.9Q Ch. 3 - Prob. 3.10Q

$ 270 , 000 Concept introduction The consolidation process is the process of adding all the financial values of all the associate companies into one final financial report as of the parent company. To prepare: The equity method entry related to the investment.

Concept explainers

$270,000

Concept introduction

The consolidation process is the process of adding all the financial values of all the associate companies into one final financial report as of the parent company.

To prepare: The equity method entry related to the investment.

Answer to Problem 3.27P

Explanation of Solution

Concept introduction

Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

To prepare: The consolidate worksheet of the final values by the company.

Answer to Problem 3.27P

Explanation of Solution

Want to see more full solutions like this?

Chapter 3 Solutions

$ 270 , 000 Concept introduction The consolidation process is the process of adding all the financial values of all the associate companies into one final financial report as of the parent company. To prepare: The equity method entry related to the investment.

Concept explainers

$270,000 Concept introduction The consolidation process is the process of adding all the financial values of all the associate companies into one final financial report as of the parent company. To prepare: The equity method entry related to the investment.

Answer to Problem 3.27P

Explanation of Solution

Concept introduction Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company. To prepare: The consolidate worksheet of the final values by the company.

Answer to Problem 3.27P

Explanation of Solution

Want to see more full solutions like this?

Chapter 3 Solutions

$270,000

Concept introduction

The consolidation process is the process of adding all the financial values of all the associate companies into one final financial report as of the parent company.

To prepare: The equity method entry related to the investment.

Concept introduction

Consolidated balance sheets and worksheets are the tools that are used to calculate the retained earnings and the dividends produce by the subsidiaries towards its parent company.

To prepare: The consolidate worksheet of the final values by the company.