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Required: Prepare a consolidated statement of changes in equity for the year ended December 31, Year 10. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. Omit $ sign in your response.) Balance, beginning of year Add: Net income Less: Dividends Retained earnings, Dec. 31 P Co. Consolidated Statement of Changes in Equity For Year Ended December 31, Year 10 Common Shares $ $ Retained Earnings $ $ Total $ $ Non-controlling Interest $ $ Total $ $

Required: Prepare a consolidated statement of changes in equity for the year ended December 31, Year 10. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. Omit $ sign in your response.) Balance, beginning of year Add: Net income Less: Dividends Retained earnings, Dec. 31 P Co. Consolidated Statement of Changes in Equity For Year Ended December 31, Year 10 Common Shares $ $ Retained Earnings $ $ Total $ $ Non-controlling Interest $ $ Total $ $

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The partial trial balances of P Co. and S Co. at December 31, Year 10, were as follows: Investment in S. Co. Common shares Retained earnings, beginning of year Additional Information ● P Co. S Co. $78,000 66,000 P Co. Balance, beginning of year Add: Net income + Less: Dividends + Retained earnings, Dec. 31 Dr 252,000 The investment in the shares of S Co. (a 90% interest) was acquired January 2, Year 6, for $252,000. At that time, the shareholders' equity of S Co. was common shares of $204,000 and retained earnings of $38,000 and the common shares for P Co. of $168,000. • Net incomes of the two companies for the year were as follows: Common Shares $ $ Cr. 168,000 149,000 During Year 10, sales of P Co. to S Co. were $28,000, and sales of S Co. to P Co. were $68,000. Rates of gross profit on intercompany sales in Years 9 and 10 were 30% of sales. • On December 31, Year 9, the inventory of P Co. included $25,000 of merchandise purchased from S Co., and the inventory of S Co. included $21,000 of merchandise purchased from P Co. On December 31, Year 10, the inventory of P Co. included $38,000 of merchandise purchased from S Co., and the inventory of S Co. included $23,000 of merchandise purchased from P Co. During the year ended December 31, Year 10, P Co. paid dividends of $30,000 and S Co. paid dividends of $28,000. • At the time that P Co. purchased the shares of S Co., the acquisition differential was allocated to patents of S Co. These patents are being amortized for consolidation purposes over a period of five years. • In Year 8, land that originally cost $58,000 was sold by S Co. to P Co. for $69,800. The land is still owned by P Co. • Assume a corporate tax rate of 40%. Dr S Co. Required: Prepare a consolidated statement of changes in equity for the year ended December 31, Year 10. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. Omit $ sign in your response.) Retained Earnings $ $ Cr. 204,000 80,500 P Co. Consolidated Statement of Changes in Equity For Year Ended December 31, Year 10 Total $ $ Non-controlling Interest $ $ Total $ $
Transcribed Image Text:The partial trial balances of P Co. and S Co. at December 31, Year 10, were as follows: Investment in S. Co. Common shares Retained earnings, beginning of year Additional Information ● P Co. S Co. $78,000 66,000 P Co. Balance, beginning of year Add: Net income + Less: Dividends + Retained earnings, Dec. 31 Dr 252,000 The investment in the shares of S Co. (a 90% interest) was acquired January 2, Year 6, for $252,000. At that time, the shareholders' equity of S Co. was common shares of $204,000 and retained earnings of $38,000 and the common shares for P Co. of $168,000. • Net incomes of the two companies for the year were as follows: Common Shares $ $ Cr. 168,000 149,000 During Year 10, sales of P Co. to S Co. were $28,000, and sales of S Co. to P Co. were $68,000. Rates of gross profit on intercompany sales in Years 9 and 10 were 30% of sales. • On December 31, Year 9, the inventory of P Co. included $25,000 of merchandise purchased from S Co., and the inventory of S Co. included $21,000 of merchandise purchased from P Co. On December 31, Year 10, the inventory of P Co. included $38,000 of merchandise purchased from S Co., and the inventory of S Co. included $23,000 of merchandise purchased from P Co. During the year ended December 31, Year 10, P Co. paid dividends of $30,000 and S Co. paid dividends of $28,000. • At the time that P Co. purchased the shares of S Co., the acquisition differential was allocated to patents of S Co. These patents are being amortized for consolidation purposes over a period of five years. • In Year 8, land that originally cost $58,000 was sold by S Co. to P Co. for $69,800. The land is still owned by P Co. • Assume a corporate tax rate of 40%. Dr S Co. Required: Prepare a consolidated statement of changes in equity for the year ended December 31, Year 10. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. Omit $ sign in your response.) Retained Earnings $ $ Cr. 204,000 80,500 P Co. Consolidated Statement of Changes in Equity For Year Ended December 31, Year 10 Total $ $ Non-controlling Interest $ $ Total $ $
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