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 $ $
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 17E
Related questions
Question
![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
$
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0203c44b-4e80-4a0d-8c3d-33c98e4f6dfe%2F5710087b-4afe-49b7-b0b1-b3f4e10c0cfa%2Fuhwjfhc_processed.jpeg&w=3840&q=75)
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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