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P S Eliminations Noncontrolling Consolidated Corp. Dr. Cr. Interest Balances Income Statement Sales Dividend Income Cost of Sales Other Expenses Noncontrolling Interest in Income Net Income Retained Earnings Statement Retained Earnings 1/1 Corp. $ 200,000.00 $ 150,000.00 16,000.00 S (92,000.00) $ (47,000.00) S (23,000.00) $ (40,000.00) $ 101,000.00 $ 63,000.00 $ 110,000.00 $ 30,000.00 Add: Net Income $ 101,000.00 S 63,000.00 Less: Dividends S (30,000.00) $ (20,000.00) Retained Earnings 12/31 $ 181,000.00 S 73,000.00 20,000.00 $ 19,000.00 55,000.00 Balance Sheet Cash Accounts Receivable-net Inventories Patent Land Equipment and Buildings-net Investment in S Corporation Total Assets Equities Accounts Payable Common Stock Retained Earnings 1/1 Noncontrolling Interest in Net Assets 12/31 Noncontrolling Interest in Net Assets Total Equities $ 120,000.00 $ $ 140,000.00 $ 80,000.00 $ 270,000.00 $420,000.00 $ 600,000.00 $ 430,000.00 $ 240,000.00 $ 695,000.00 $1,004,000.00 $ 909,000.00 $ 831,000.00 $ 300,000.00 $ 100,000.00 $ 181,000.00 $ 73,000.00 $ 1,390,000.00 $ 1,004,000.00

P S Eliminations Noncontrolling Consolidated Corp. Dr. Cr. Interest Balances Income Statement Sales Dividend Income Cost of Sales Other Expenses Noncontrolling Interest in Income Net Income Retained Earnings Statement Retained Earnings 1/1 Corp. $ 200,000.00 $ 150,000.00 16,000.00 S (92,000.00) $ (47,000.00) S (23,000.00) $ (40,000.00) $ 101,000.00 $ 63,000.00 $ 110,000.00 $ 30,000.00 Add: Net Income $ 101,000.00 S 63,000.00 Less: Dividends S (30,000.00) $ (20,000.00) Retained Earnings 12/31 $ 181,000.00 S 73,000.00 20,000.00 $ 19,000.00 55,000.00 Balance Sheet Cash Accounts Receivable-net Inventories Patent Land Equipment and Buildings-net Investment in S Corporation Total Assets Equities Accounts Payable Common Stock Retained Earnings 1/1 Noncontrolling Interest in Net Assets 12/31 Noncontrolling Interest in Net Assets Total Equities $ 120,000.00 $ $ 140,000.00 $ 80,000.00 $ 270,000.00 $420,000.00 $ 600,000.00 $ 430,000.00 $ 240,000.00 $ 695,000.00 $1,004,000.00 $ 909,000.00 $ 831,000.00 $ 300,000.00 $ 100,000.00 $ 181,000.00 $ 73,000.00 $ 1,390,000.00 $ 1,004,000.00

Corporate Financial Accounting
Corporate Financial Accounting
15th Edition
ISBN:9781337398169
Author:Carl Warren, Jeff Jones
Publisher:Carl Warren, Jeff Jones
Chapter14: Financial Statement Analysis
Section: Chapter Questions
Problem 14.7BE: To determine: Times interest earned ratio Given info: Income before income tax and interest expense....
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P Corporation acquired 80% of S Corporation on January 1, 2017, for $240,000 cash when
S’s stockholders’ equity consisted of $100,000 of Common Stock and $30,000 of Retained
Earnings. The difference between the price paid by P and the underlying equity acquired in S
was allocated solely to a patent amortized over 10 years.

P sold merchandise to S during the year in the amount of $30,000. $10,000 worth of inventory
is still on hand at the end of the year with an unrealized profit of $4,000. The separate company
statements for P and S appear in the first two columns of the partially completed consolidated
workpaper.

Required:
Complete the consolidated workpaper for P and S for the year 2017.

 

P S Eliminations Noncontrolling Consolidated Corp. Dr. Cr. Interest Balances Income Statement Sales Dividend Income Cost of Sales Other Expenses Noncontrolling Interest in Income Net Income Retained Earnings Statement Retained Earnings 1/1 Corp. $ 200,000.00 $ 150,000.00 16,000.00 S (92,000.00) $ (47,000.00) S (23,000.00) $ (40,000.00) $ 101,000.00 $ 63,000.00 $ 110,000.00 $ 30,000.00 Add: Net Income $ 101,000.00 S 63,000.00 Less: Dividends S (30,000.00) $ (20,000.00) Retained Earnings 12/31 $ 181,000.00 S 73,000.00 20,000.00 $ 19,000.00 55,000.00 Balance Sheet Cash Accounts Receivable-net Inventories Patent Land Equipment and Buildings-net Investment in S Corporation Total Assets Equities Accounts Payable Common Stock Retained Earnings 1/1 Noncontrolling Interest in Net Assets 12/31 Noncontrolling Interest in Net Assets Total Equities $ 120,000.00 $ $ 140,000.00 $ 80,000.00 $ 270,000.00 $420,000.00 $ 600,000.00 $ 430,000.00 $ 240,000.00 $ 695,000.00 $1,004,000.00 $ 909,000.00 $ 831,000.00 $ 300,000.00 $ 100,000.00 $ 181,000.00 $ 73,000.00 $ 1,390,000.00 $ 1,004,000.00
Transcribed Image Text:P S Eliminations Noncontrolling Consolidated Corp. Dr. Cr. Interest Balances Income Statement Sales Dividend Income Cost of Sales Other Expenses Noncontrolling Interest in Income Net Income Retained Earnings Statement Retained Earnings 1/1 Corp. $ 200,000.00 $ 150,000.00 16,000.00 S (92,000.00) $ (47,000.00) S (23,000.00) $ (40,000.00) $ 101,000.00 $ 63,000.00 $ 110,000.00 $ 30,000.00 Add: Net Income $ 101,000.00 S 63,000.00 Less: Dividends S (30,000.00) $ (20,000.00) Retained Earnings 12/31 $ 181,000.00 S 73,000.00 20,000.00 $ 19,000.00 55,000.00 Balance Sheet Cash Accounts Receivable-net Inventories Patent Land Equipment and Buildings-net Investment in S Corporation Total Assets Equities Accounts Payable Common Stock Retained Earnings 1/1 Noncontrolling Interest in Net Assets 12/31 Noncontrolling Interest in Net Assets Total Equities $ 120,000.00 $ $ 140,000.00 $ 80,000.00 $ 270,000.00 $420,000.00 $ 600,000.00 $ 430,000.00 $ 240,000.00 $ 695,000.00 $1,004,000.00 $ 909,000.00 $ 831,000.00 $ 300,000.00 $ 100,000.00 $ 181,000.00 $ 73,000.00 $ 1,390,000.00 $ 1,004,000.00
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