Prepare a worksheet to consolidate the separate 2018 financial statements for Company G and Company K.

Question

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 5, Problem 35P

a.

To determine

Prepare a worksheet to consolidate the separate 2018 financial statements for Company G and Company K.

a.

Expert Solution

Explanation of Solution

Worksheet to consolidate the separate 2018 financial statements for Company G and Company K:

Company G and Company K
Consolidation Worksheet
Year ending December 31, 2018
Income statement	Company G	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Revenues	$ (800,000)	$ (500,000)	$ 200,000			$(1,100,000)
Cost of goods sold	$ 500,000	$ 300,000	$ 12,000	$ 10,000		$ 602,000
				$ 200,000
Operating expense	$ 100,000	$ 60,000	E 5,000			$ 165,000
Equity in income of Company K	$ (84,000)		I 84,000			$ -
Net income	$ (284,000)	$ (140,000)
Consolidated net income						$ (333,000)
Share of non-controlling interest in net income					$ (53,200)	$ 53,200
Share of controlling interest in net income						$ (279,800)

Balance Sheet
Cash	$ 177,000	$ 90,000				$ 267,000
Accounts Receivables	$ 356,000	$ 410,000		$ 40,000		$ 726,000
Inventory	$ 440,000	$ 320,000		$ 12,000		$ 748,000
Investment in Company K	$ 726,000	$ -	D 36,000	$ 9,000
				$ 612,000
				$ 84,000
				$ 57,000
Land	$ 180,000	$ 390,000		$ 40,000		$ 530,000
Building and equipment	$ 496,000	$ 300,000				$ 796,000
Customer list	$ 380,000	$ 110,000	A 95,000	E 5,000		$ 90,000
Total assets	$ 2,755,000	$ 1,620,000				$ 3,157,000

Liabilities	$ (480,000)	$ (400,000)	$ 40,000			$ (920,000)
Common stock	$ (610,000)	$ (320,000)	$ 320,000			$ (610,000)
Additional paid-in capital	$ -	$ (90,000)	$ 90,000			$ -
Retained earnings	$ (1,285,000)	$ (700,000)				$(1,231,800)
Non-controlling interest in Company K				$ 408,000	$ 408,000
				A $38,000	$ 38,000
					$ 475,200	$ 475,200
Total liabilities and equity	$ (2,375,000)	$ (1,510,000)	$ 1,551,000	$ 1,551,000		$ 3,157,000

Table: (1)

Working note:

Statement of retained earnings	Company G	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Retained earnings on 01/01	$ (1,116,000)	$ (620,000)	$ 40,000			$(1,067,000)
			$ 9,000
			$ 10,000
			$ 610,000
Net Income	$ (284,000)	$ (140,000)				$ (279,800)
Dividends declared	$ 115,000	$ 60,000		D 36,000	$ 24,000	$ 115,000
Retained earnings on 31/12	$ (1,285,000)	$ (700,000)				$(1,231,800)

Table: (2)

b.

To determine

Explain how the consolidation entries in requirement (a) would have differed if Company G had sold a building with a $60,000 book value (cost of $140,000) to Company K for $100,000 instead of land.

b.

Expert Solution

Explanation of Solution

Entry TA:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Retained earnings of Company K on 01/01/2013		$ 36,000
	Buildings		$ 40,000
	Accumulated depreciation			$ 76,000
	(being excess depreciation removed)

Table: (3)

Entry ED:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Accumulated depreciation		$ 4,000
	Depreciation expense			$ 4,000
	(being excess depreciation on building recorded)

Table: (4)

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 5, Problem 35P

a.

To determine

Prepare a worksheet to consolidate the separate 2018 financial statements for Company G and Company K.

a.

Expert Solution

Explanation of Solution

Worksheet to consolidate the separate 2018 financial statements for Company G and Company K:

Company G and Company K
Consolidation Worksheet
Year ending December 31, 2018
Income statement	Company G	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Revenues	$ (800,000)	$ (500,000)	$ 200,000			$(1,100,000)
Cost of goods sold	$ 500,000	$ 300,000	$ 12,000	$ 10,000		$ 602,000
				$ 200,000
Operating expense	$ 100,000	$ 60,000	E 5,000			$ 165,000
Equity in income of Company K	$ (84,000)		I 84,000			$ -
Net income	$ (284,000)	$ (140,000)
Consolidated net income						$ (333,000)
Share of non-controlling interest in net income					$ (53,200)	$ 53,200
Share of controlling interest in net income						$ (279,800)

Balance Sheet
Cash	$ 177,000	$ 90,000				$ 267,000
Accounts Receivables	$ 356,000	$ 410,000		$ 40,000		$ 726,000
Inventory	$ 440,000	$ 320,000		$ 12,000		$ 748,000
Investment in Company K	$ 726,000	$ -	D 36,000	$ 9,000
				$ 612,000
				$ 84,000
				$ 57,000
Land	$ 180,000	$ 390,000		$ 40,000		$ 530,000
Building and equipment	$ 496,000	$ 300,000				$ 796,000
Customer list	$ 380,000	$ 110,000	A 95,000	E 5,000		$ 90,000
Total assets	$ 2,755,000	$ 1,620,000				$ 3,157,000

Liabilities	$ (480,000)	$ (400,000)	$ 40,000			$ (920,000)
Common stock	$ (610,000)	$ (320,000)	$ 320,000			$ (610,000)
Additional paid-in capital	$ -	$ (90,000)	$ 90,000			$ -
Retained earnings	$ (1,285,000)	$ (700,000)				$(1,231,800)
Non-controlling interest in Company K				$ 408,000	$ 408,000
				A $38,000	$ 38,000
					$ 475,200	$ 475,200
Total liabilities and equity	$ (2,375,000)	$ (1,510,000)	$ 1,551,000	$ 1,551,000		$ 3,157,000

Table: (1)

Working note:

Statement of retained earnings	Company G	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Retained earnings on 01/01	$ (1,116,000)	$ (620,000)	$ 40,000			$(1,067,000)
			$ 9,000
			$ 10,000
			$ 610,000
Net Income	$ (284,000)	$ (140,000)				$ (279,800)
Dividends declared	$ 115,000	$ 60,000		D 36,000	$ 24,000	$ 115,000
Retained earnings on 31/12	$ (1,285,000)	$ (700,000)				$(1,231,800)

Table: (2)

b.

To determine

Explain how the consolidation entries in requirement (a) would have differed if Company G had sold a building with a $60,000 book value (cost of $140,000) to Company K for $100,000 instead of land.

b.

Expert Solution

Explanation of Solution

Entry TA:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Retained earnings of Company K on 01/01/2013		$ 36,000
	Buildings		$ 40,000
	Accumulated depreciation			$ 76,000
	(being excess depreciation removed)

Table: (3)

Entry ED:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Accumulated depreciation		$ 4,000
	Depreciation expense			$ 4,000
	(being excess depreciation on building recorded)

Table: (4)

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 5, Problem 35P

a.

To determine

Prepare a worksheet to consolidate the separate 2018 financial statements for Company G and Company K.

a.

Expert Solution

Explanation of Solution

Worksheet to consolidate the separate 2018 financial statements for Company G and Company K:

Company G and Company K
Consolidation Worksheet
Year ending December 31, 2018
Income statement	Company G	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Revenues	$ (800,000)	$ (500,000)	$ 200,000			$(1,100,000)
Cost of goods sold	$ 500,000	$ 300,000	$ 12,000	$ 10,000		$ 602,000
				$ 200,000
Operating expense	$ 100,000	$ 60,000	E 5,000			$ 165,000
Equity in income of Company K	$ (84,000)		I 84,000			$ -
Net income	$ (284,000)	$ (140,000)
Consolidated net income						$ (333,000)
Share of non-controlling interest in net income					$ (53,200)	$ 53,200
Share of controlling interest in net income						$ (279,800)

Balance Sheet
Cash	$ 177,000	$ 90,000				$ 267,000
Accounts Receivables	$ 356,000	$ 410,000		$ 40,000		$ 726,000
Inventory	$ 440,000	$ 320,000		$ 12,000		$ 748,000
Investment in Company K	$ 726,000	$ -	D 36,000	$ 9,000
				$ 612,000
				$ 84,000
				$ 57,000
Land	$ 180,000	$ 390,000		$ 40,000		$ 530,000
Building and equipment	$ 496,000	$ 300,000				$ 796,000
Customer list	$ 380,000	$ 110,000	A 95,000	E 5,000		$ 90,000
Total assets	$ 2,755,000	$ 1,620,000				$ 3,157,000

Liabilities	$ (480,000)	$ (400,000)	$ 40,000			$ (920,000)
Common stock	$ (610,000)	$ (320,000)	$ 320,000			$ (610,000)
Additional paid-in capital	$ -	$ (90,000)	$ 90,000			$ -
Retained earnings	$ (1,285,000)	$ (700,000)				$(1,231,800)
Non-controlling interest in Company K				$ 408,000	$ 408,000
				A $38,000	$ 38,000
					$ 475,200	$ 475,200
Total liabilities and equity	$ (2,375,000)	$ (1,510,000)	$ 1,551,000	$ 1,551,000		$ 3,157,000

Table: (1)

Working note:

Statement of retained earnings	Company G	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Retained earnings on 01/01	$ (1,116,000)	$ (620,000)	$ 40,000			$(1,067,000)
			$ 9,000
			$ 10,000
			$ 610,000
Net Income	$ (284,000)	$ (140,000)				$ (279,800)
Dividends declared	$ 115,000	$ 60,000		D 36,000	$ 24,000	$ 115,000
Retained earnings on 31/12	$ (1,285,000)	$ (700,000)				$(1,231,800)

Table: (2)

b.

To determine

Explain how the consolidation entries in requirement (a) would have differed if Company G had sold a building with a $60,000 book value (cost of $140,000) to Company K for $100,000 instead of land.

b.

Expert Solution

Explanation of Solution

Entry TA:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Retained earnings of Company K on 01/01/2013		$ 36,000
	Buildings		$ 40,000
	Accumulated depreciation			$ 76,000
	(being excess depreciation removed)

Table: (3)

Entry ED:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Accumulated depreciation		$ 4,000
	Depreciation expense			$ 4,000
	(being excess depreciation on building recorded)

Table: (4)

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 5, Problem 35P

a.

To determine

Prepare a worksheet to consolidate the separate 2018 financial statements for Company G and Company K.

a.

Expert Solution

Explanation of Solution

Worksheet to consolidate the separate 2018 financial statements for Company G and Company K:

Company G and Company K
Consolidation Worksheet
Year ending December 31, 2018
Income statement	Company G	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Revenues	$ (800,000)	$ (500,000)	$ 200,000			$(1,100,000)
Cost of goods sold	$ 500,000	$ 300,000	$ 12,000	$ 10,000		$ 602,000
				$ 200,000
Operating expense	$ 100,000	$ 60,000	E 5,000			$ 165,000
Equity in income of Company K	$ (84,000)		I 84,000			$ -
Net income	$ (284,000)	$ (140,000)
Consolidated net income						$ (333,000)
Share of non-controlling interest in net income					$ (53,200)	$ 53,200
Share of controlling interest in net income						$ (279,800)

Balance Sheet
Cash	$ 177,000	$ 90,000				$ 267,000
Accounts Receivables	$ 356,000	$ 410,000		$ 40,000		$ 726,000
Inventory	$ 440,000	$ 320,000		$ 12,000		$ 748,000
Investment in Company K	$ 726,000	$ -	D 36,000	$ 9,000
				$ 612,000
				$ 84,000
				$ 57,000
Land	$ 180,000	$ 390,000		$ 40,000		$ 530,000
Building and equipment	$ 496,000	$ 300,000				$ 796,000
Customer list	$ 380,000	$ 110,000	A 95,000	E 5,000		$ 90,000
Total assets	$ 2,755,000	$ 1,620,000				$ 3,157,000

Liabilities	$ (480,000)	$ (400,000)	$ 40,000			$ (920,000)
Common stock	$ (610,000)	$ (320,000)	$ 320,000			$ (610,000)
Additional paid-in capital	$ -	$ (90,000)	$ 90,000			$ -
Retained earnings	$ (1,285,000)	$ (700,000)				$(1,231,800)
Non-controlling interest in Company K				$ 408,000	$ 408,000
				A $38,000	$ 38,000
					$ 475,200	$ 475,200
Total liabilities and equity	$ (2,375,000)	$ (1,510,000)	$ 1,551,000	$ 1,551,000		$ 3,157,000

Table: (1)

Working note:

Statement of retained earnings	Company G	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Retained earnings on 01/01	$ (1,116,000)	$ (620,000)	$ 40,000			$(1,067,000)
			$ 9,000
			$ 10,000
			$ 610,000
Net Income	$ (284,000)	$ (140,000)				$ (279,800)
Dividends declared	$ 115,000	$ 60,000		D 36,000	$ 24,000	$ 115,000
Retained earnings on 31/12	$ (1,285,000)	$ (700,000)				$(1,231,800)

Table: (2)

b.

To determine

Explain how the consolidation entries in requirement (a) would have differed if Company G had sold a building with a $60,000 book value (cost of $140,000) to Company K for $100,000 instead of land.

b.

Expert Solution

Explanation of Solution

Entry TA:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Retained earnings of Company K on 01/01/2013		$ 36,000
	Buildings		$ 40,000
	Accumulated depreciation			$ 76,000
	(being excess depreciation removed)

Table: (3)

Entry ED:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Accumulated depreciation		$ 4,000
	Depreciation expense			$ 4,000
	(being excess depreciation on building recorded)

Table: (4)

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Answer 5

Chapter 5, Problem 35P

a.

To determine

Prepare a worksheet to consolidate the separate 2018 financial statements for Company G and Company K.

a.

Expert Solution

Explanation of Solution

Worksheet to consolidate the separate 2018 financial statements for Company G and Company K:

Company G and Company K
Consolidation Worksheet
Year ending December 31, 2018
Income statement	Company G	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Revenues	$ (800,000)	$ (500,000)	$ 200,000			$(1,100,000)
Cost of goods sold	$ 500,000	$ 300,000	$ 12,000	$ 10,000		$ 602,000
				$ 200,000
Operating expense	$ 100,000	$ 60,000	E 5,000			$ 165,000
Equity in income of Company K	$ (84,000)		I 84,000			$ -
Net income	$ (284,000)	$ (140,000)
Consolidated net income						$ (333,000)
Share of non-controlling interest in net income					$ (53,200)	$ 53,200
Share of controlling interest in net income						$ (279,800)

Balance Sheet
Cash	$ 177,000	$ 90,000				$ 267,000
Accounts Receivables	$ 356,000	$ 410,000		$ 40,000		$ 726,000
Inventory	$ 440,000	$ 320,000		$ 12,000		$ 748,000
Investment in Company K	$ 726,000	$ -	D 36,000	$ 9,000
				$ 612,000
				$ 84,000
				$ 57,000
Land	$ 180,000	$ 390,000		$ 40,000		$ 530,000
Building and equipment	$ 496,000	$ 300,000				$ 796,000
Customer list	$ 380,000	$ 110,000	A 95,000	E 5,000		$ 90,000
Total assets	$ 2,755,000	$ 1,620,000				$ 3,157,000

Liabilities	$ (480,000)	$ (400,000)	$ 40,000			$ (920,000)
Common stock	$ (610,000)	$ (320,000)	$ 320,000			$ (610,000)
Additional paid-in capital	$ -	$ (90,000)	$ 90,000			$ -
Retained earnings	$ (1,285,000)	$ (700,000)				$(1,231,800)
Non-controlling interest in Company K				$ 408,000	$ 408,000
				A $38,000	$ 38,000
					$ 475,200	$ 475,200
Total liabilities and equity	$ (2,375,000)	$ (1,510,000)	$ 1,551,000	$ 1,551,000		$ 3,157,000

Table: (1)

Working note:

Statement of retained earnings	Company G	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Retained earnings on 01/01	$ (1,116,000)	$ (620,000)	$ 40,000			$(1,067,000)
			$ 9,000
			$ 10,000
			$ 610,000
Net Income	$ (284,000)	$ (140,000)				$ (279,800)
Dividends declared	$ 115,000	$ 60,000		D 36,000	$ 24,000	$ 115,000
Retained earnings on 31/12	$ (1,285,000)	$ (700,000)				$(1,231,800)

Table: (2)

b.

To determine

Explain how the consolidation entries in requirement (a) would have differed if Company G had sold a building with a $60,000 book value (cost of $140,000) to Company K for $100,000 instead of land.

b.

Expert Solution

Explanation of Solution

Entry TA:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Retained earnings of Company K on 01/01/2013		$ 36,000
	Buildings		$ 40,000
	Accumulated depreciation			$ 76,000
	(being excess depreciation removed)

Table: (3)

Entry ED:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Accumulated depreciation		$ 4,000
	Depreciation expense			$ 4,000
	(being excess depreciation on building recorded)

Table: (4)

Answer 6

Chapter 5, Problem 35P

a.

To determine

Prepare a worksheet to consolidate the separate 2018 financial statements for Company G and Company K.

a.

Expert Solution

Explanation of Solution

Worksheet to consolidate the separate 2018 financial statements for Company G and Company K:

Company G and Company K
Consolidation Worksheet
Year ending December 31, 2018
Income statement	Company G	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Revenues	$ (800,000)	$ (500,000)	$ 200,000			$(1,100,000)
Cost of goods sold	$ 500,000	$ 300,000	$ 12,000	$ 10,000		$ 602,000
				$ 200,000
Operating expense	$ 100,000	$ 60,000	E 5,000			$ 165,000
Equity in income of Company K	$ (84,000)		I 84,000			$ -
Net income	$ (284,000)	$ (140,000)
Consolidated net income						$ (333,000)
Share of non-controlling interest in net income					$ (53,200)	$ 53,200
Share of controlling interest in net income						$ (279,800)

Balance Sheet
Cash	$ 177,000	$ 90,000				$ 267,000
Accounts Receivables	$ 356,000	$ 410,000		$ 40,000		$ 726,000
Inventory	$ 440,000	$ 320,000		$ 12,000		$ 748,000
Investment in Company K	$ 726,000	$ -	D 36,000	$ 9,000
				$ 612,000
				$ 84,000
				$ 57,000
Land	$ 180,000	$ 390,000		$ 40,000		$ 530,000
Building and equipment	$ 496,000	$ 300,000				$ 796,000
Customer list	$ 380,000	$ 110,000	A 95,000	E 5,000		$ 90,000
Total assets	$ 2,755,000	$ 1,620,000				$ 3,157,000

Liabilities	$ (480,000)	$ (400,000)	$ 40,000			$ (920,000)
Common stock	$ (610,000)	$ (320,000)	$ 320,000			$ (610,000)
Additional paid-in capital	$ -	$ (90,000)	$ 90,000			$ -
Retained earnings	$ (1,285,000)	$ (700,000)				$(1,231,800)
Non-controlling interest in Company K				$ 408,000	$ 408,000
				A $38,000	$ 38,000
					$ 475,200	$ 475,200
Total liabilities and equity	$ (2,375,000)	$ (1,510,000)	$ 1,551,000	$ 1,551,000		$ 3,157,000

Table: (1)

Working note:

Statement of retained earnings	Company G	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Retained earnings on 01/01	$ (1,116,000)	$ (620,000)	$ 40,000			$(1,067,000)
			$ 9,000
			$ 10,000
			$ 610,000
Net Income	$ (284,000)	$ (140,000)				$ (279,800)
Dividends declared	$ 115,000	$ 60,000		D 36,000	$ 24,000	$ 115,000
Retained earnings on 31/12	$ (1,285,000)	$ (700,000)				$(1,231,800)

Table: (2)

Answer 7

Chapter 5, Problem 35P

a.

To determine

Prepare a worksheet to consolidate the separate 2018 financial statements for Company G and Company K.

Answer 8

a.

Expert Solution

Explanation of Solution

Worksheet to consolidate the separate 2018 financial statements for Company G and Company K:

Company G and Company K
Consolidation Worksheet
Year ending December 31, 2018
Income statement	Company G	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Revenues	$ (800,000)	$ (500,000)	$ 200,000			$(1,100,000)
Cost of goods sold	$ 500,000	$ 300,000	$ 12,000	$ 10,000		$ 602,000
				$ 200,000
Operating expense	$ 100,000	$ 60,000	E 5,000			$ 165,000
Equity in income of Company K	$ (84,000)		I 84,000			$ -
Net income	$ (284,000)	$ (140,000)
Consolidated net income						$ (333,000)
Share of non-controlling interest in net income					$ (53,200)	$ 53,200
Share of controlling interest in net income						$ (279,800)

Balance Sheet
Cash	$ 177,000	$ 90,000				$ 267,000
Accounts Receivables	$ 356,000	$ 410,000		$ 40,000		$ 726,000
Inventory	$ 440,000	$ 320,000		$ 12,000		$ 748,000
Investment in Company K	$ 726,000	$ -	D 36,000	$ 9,000
				$ 612,000
				$ 84,000
				$ 57,000
Land	$ 180,000	$ 390,000		$ 40,000		$ 530,000
Building and equipment	$ 496,000	$ 300,000				$ 796,000
Customer list	$ 380,000	$ 110,000	A 95,000	E 5,000		$ 90,000
Total assets	$ 2,755,000	$ 1,620,000				$ 3,157,000

Liabilities	$ (480,000)	$ (400,000)	$ 40,000			$ (920,000)
Common stock	$ (610,000)	$ (320,000)	$ 320,000			$ (610,000)
Additional paid-in capital	$ -	$ (90,000)	$ 90,000			$ -
Retained earnings	$ (1,285,000)	$ (700,000)				$(1,231,800)
Non-controlling interest in Company K				$ 408,000	$ 408,000
				A $38,000	$ 38,000
					$ 475,200	$ 475,200
Total liabilities and equity	$ (2,375,000)	$ (1,510,000)	$ 1,551,000	$ 1,551,000		$ 3,157,000

Table: (1)

Working note:

Statement of retained earnings	Company G	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Retained earnings on 01/01	$ (1,116,000)	$ (620,000)	$ 40,000			$(1,067,000)
			$ 9,000
			$ 10,000
			$ 610,000
Net Income	$ (284,000)	$ (140,000)				$ (279,800)
Dividends declared	$ 115,000	$ 60,000		D 36,000	$ 24,000	$ 115,000
Retained earnings on 31/12	$ (1,285,000)	$ (700,000)				$(1,231,800)

Table: (2)

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

b.

To determine

Explain how the consolidation entries in requirement (a) would have differed if Company G had sold a building with a $60,000 book value (cost of $140,000) to Company K for $100,000 instead of land.

b.

Expert Solution

Explanation of Solution

Entry TA:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Retained earnings of Company K on 01/01/2013		$ 36,000
	Buildings		$ 40,000
	Accumulated depreciation			$ 76,000
	(being excess depreciation removed)

Table: (3)

Entry ED:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Accumulated depreciation		$ 4,000
	Depreciation expense			$ 4,000
	(being excess depreciation on building recorded)

Table: (4)

Answer 13

b.

To determine

Explain how the consolidation entries in requirement (a) would have differed if Company G had sold a building with a $60,000 book value (cost of $140,000) to Company K for $100,000 instead of land.

Answer 14

b.

Expert Solution

Explanation of Solution

Entry TA:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Retained earnings of Company K on 01/01/2013		$ 36,000
	Buildings		$ 40,000
	Accumulated depreciation			$ 76,000
	(being excess depreciation removed)

Table: (3)

Entry ED:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Accumulated depreciation		$ 4,000
	Depreciation expense			$ 4,000
	(being excess depreciation on building recorded)

Table: (4)

Answer 15

b.

Expert Solution

Answer 16

b.

Expert Solution

Answer 17

Expert Solution

Answer 18

Ch. 5 - Prob. 1Q Ch. 5 - Prob. 2Q Ch. 5 - Prob. 3Q Ch. 5 - Prob. 4Q Ch. 5 - James, Inc., sells inventory to Matthews Company,...Ch. 5 - Prob. 6Q Ch. 5 - Prob. 7Q Ch. 5 - Prob. 8Q Ch. 5 - Prob. 9Q Ch. 5 - Prob. 10Q

Prepare a worksheet to consolidate the separate 2018 financial statements for Company G and Company K.

Prepare a worksheet to consolidate the separate 2018 financial statements for Company G and Company K.

Explanation of Solution

Explain how the consolidation entries in requirement (a) would have differed if Company G had sold a building with a $60,000 book value (cost of $140,000) to Company K for $100,000 instead of land.

Explanation of Solution

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