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P 4-12
Workpapers (two years after acquisition, fair value/book differentials, adjustment)
Pat Corporation acquired an 80 percent interest in Sci Corporation for $480.000 on January 1 2011,
when Sci's Stockholders' equity consisted of $400.000 capital stock and $50.000 retained earnings.
The excess fair value over book value acquired was assigned to plant assets that were undervalued
by $100.000 and to goodwill. The undervalued plant assets had a four-year useful life.
ADDITIONAL INFORMATION
1. Pat's account receivable includes $10.000 owed by Sci
2. Sci mailed its check for $40.000 to Pat on December 30, 2012, in settlement of the advance
3. A $20.000 dividend was declared by Sci on December 30, 2012, but was not recorded by Pat
4. Financial statements for Pat and Sci Corporations for 2012 follow
Pat Sci
Statements of income and retained earnings
for the year ended december 31
Sales $ 1,800,000 $ 600,000
Income from Sci $ 76,000 $ -
Cost of Sales $ (1,200,000) $ (300,000)
Operating Expenses $ (380,000) $ (180,000)
Net Income $ 296,000 $ 120,000
Add : Retained earnings January 1 $ 244,000 $ 100,000
Less : Devidends $ (200,000) $ (40,000)
Retaines earnings December 31 $ 340,000 $ 180,000
Allocation Amortization
Plant Assets 100,000 4 Year 25,000 75,000 amortisasi yang tersisa
Goodwill 50,000
Atau
Calculate Income
Sci Reported Income 120,000
Amortization
Plant Asset (25,000)
Total Income 95,000
CI 76,000
NCI 19,000
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Pat Sci Debit Credit Consolidation
Statements of income and retained earnings
for the year ended december 31
Sales 1,800,000 600,000 2,400,000
Income from Sci 76,000 - 3 76,000 -
Cost of Sales (1,200,000) (300,000) (1,500,000)
Operating Expenses (380,000) (180,000) 2 25,000 (585,000)
Consolidated Net Income 315,000
Non Controlling Shares 4 19,000 (19,000)
Controlling Share 296,000 120,000 296,000
Retained Earnings
Retained earnings- Pat (Jan, 1 2011) 244,000 244,000
Retained earnings- Sci (Jan, 1 2011 100,000 1 100,000 -
Add : Controlling shares 296,000 120,000 296,000
Less : Devidends (200,000) (40,000) 3.4 40,000 (200,000)
Retaines earnings December 31 340,000 180,000 340,000
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