Student Name: Instructor

Class: McGraw-Hill/Irwin
Problem 04-32

FATHER, INC. AND SAM CORPORATION

- Purchase price allocation and annual amortization

Acqisition-date subsidiary fair value $ 850,000

Book value of subsidiary (600,000)
Fair value in excess of book value $ 250,000 Correct!

Allocations to specific accounts based on difference

between fair value and book value:
Land $ 165,000
Buildings and equipment (25,000)
Copyright 100,000
Notes payable 10,000 250,000
Total $ -
Correct!

Life Excess
Annual excess amortizations: (years) Amortizations
Buildings and equipment 25,000 10 $ (2,500)
Copyright 100,000 20 5,000
Notes payable 10,000 8 1,250
Total $ 3,750
Correct!
 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 04-32

Totals for the business combination for the year ending December 31, 2006
FATHER, INC. AND SAM CORPORATION

Account Name Balance Explanation

Revenues 1,900,000 Add the two book values

Cost of goods sold 1,085,000 Add the two book values

Depreciation expense 267,500 Add the two book values less $2,500 excess adjustment

Amortization expense 10,000 Add the two book values plus $5,000 excess adjustment

Interest expense 50,250 Add the two book values plus $1,250 excess adjustment

Equity in income of Sam - Eliminated so that the individual revenues and expenses
of the subsidiary can be included in the consolidated
figures
Net income 487,250 Revenues less expenses

Retained earnings, 1/1 1,265,000 Parent company balance; sunsidiary's operations prior to
acquisition do not affect consolidated figures

Noncontrolling interest in income 26,250 $135,000 reported income of the subsidiary less $3,750
of subsidiary amortization expense multiplied by 20% outside ownership

Dividends paid 260,000 parent company balance; subsidiary's payments to parent

are intercompany, payments to outside owners decrease
noncontrolling interest balance
Retained earnings, 12/31 1,466,000 Consolidated balance on 1/1/06 plus consolidated net income
less noncontrolling interest in subsidiary's income less
consolidated dividends
Current assets 1,493,000 Add the two book values

Investment in Sam - Eliminated so that the individual assets and liabilities

of the subsidiary can be included in the consolidated figures

Land 517,000 Add the two book values plus the $165,000 allocation

Buildings and equipment (net) 1,119,500 Add the book values less the $25,000 allocation [asset was
overvalued] plus the excess amortization

Copyright 190,000 Book value plus $100,000 excess allocation less amortization
for the year

Total assets 3,319,500

Accounts payable 339,000 Add book values

Notes payable 581,250 Add the book values less $10,000 excess allocation plus
amortization

Noncontrolling interest in Sam 183,250 20% of fair value as of 1/1/06 [$170,000] plus noncontrolling
interest in income of subsidiary [$26,250] less dividends paid to
outside owners [$13,000]
Common stock 300,000 Parent company balance

Additional paid-in capital 450,000 Parent company balance

Retained earnings, 12/31 1,466,000 Computed above

 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 04-32

Total liabilities & equities 3,319,500

 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 04-32

FATHER, INC. AND SAM CORPORATION

Consolidation Worksheet
Non-
Father, Sam Consolidation Entries controlling Consolidated
Accounts Inc. Corporation Debit Credit Interest Totals
Revenues $ (1,360,000) $ (540,000) $ (1,900,000) Correct!
Cost of goods sold 700,000 385,000 1,085,000 Correct!
Depreciation expense 260,000 10,000 [E] 2,500 267,500 Correct!
Amortization expense - 5,000 [E] 5,000 10,000 Correct!
Interest expense 44,000 5,000 [E] 1,250 50,250 Correct!
Equity in income of Sam (105,000) - [I] 105,000 - Correct!
Separate company net income $ (461,000) $ (135,000)
Consolidated net income $ (487,250) Correct!

Noncontrolling interest in Sam's income (26,250) 26,250 Correct!

Controlling interest in CNI (461,000) Correct!

Retained earnings, 1/1 $ (1,265,000) $ (440,000) [S] 440,000 $ (1,265,000) Correct!

Net income (461,000) (135,000) (461,000) Correct!
Dividends paid 260,000 65,000 [D] 52,000 13,000 260,000 Correct!
Retained earnings, 12/31 $ (1,466,000) $ (510,000) $ (1,466,000) Correct!

Current assets $ 965,000 $ 528,000 $ 1,493,000 Correct!

Investment in Sam 733,000 - [D] 52,000 [S] 480,000 - Correct!
[I] 105,000
[A] 200,000
Land 292,000 60,000 [A] 165,000 517,000 Correct!
Buildings and equipment (net) 877,000 265,000 [E] 2,500 [A] 25,000 1,119,500 Correct!
Copyright - 95,000 [A] 100,000 [E] 5,000 190,000 Correct!
Total assets $ 2,867,000 $ 948,000 $ 3,319,500 Correct!

Accounts payable (191,000) (148,000) (339,000) Correct!

Notes payable (460,000) (130,000) [A] 10,000 [E] 1,250 (581,250) Correct!
NCI in Sam 1/1 [S] 120,000
NCI in Sam 12/31 [A] 50,000 (170,000) (183,250) Correct!
Common stock (300,000) (100,000) [S] 100,000 (300,000) Correct!
Additional paid-in capital (450,000) (60,000) [S] 60,000 (450,000) Correct!
Retained earnings, 12/31 (1,466,000) (510,000) (1,466,000) Correct!
Total liabilities and equity $ (2,867,000) $ (948,000) $ (3,319,500) Correct!

Parentheses indicate a credit balance.

Given Data P04-32

Sam Corporation outstanding common stock 80%

acquired by Father, Inc.
Cash paid by Father, Inc. for $ 680,000
Sam Corporation shares
Book value of Sam Corporation 600,000

Sam accounts values on 1/1/09

Book Fair
Value Value
Land $ 60,000 $ 225,000
Buildings and equipment 275,000 250,000
(10-year remaining life)
Copyright (20-year life) 100,000 200,000
Notes payable (due in 8 years) 130,000 120,000

Father, Sam
Inc. Corporation
12/31/2009 12/31/2009
Revenues $(1,360,000) $ (540,000)
Cost of goods sold 700,000 385,000
Depreciation expense 260,000 10,000
Amortization expense - 5,000
Interest expense 44,000 5,000
Equity in income of Sam (105,000) -
Net income $ (461,000) $ (135,000)

Retained earnings, 1/1/0 (1,265,000) (440,000)

Net income (461,000) (135,000)
Dividends paid 260,000 65,000
Retained earnings, 12/31/09 $(1,466,000) $ (510,000)

Current assets $ 965,000 $ 528,000

Investment in Sam 733,000 -
Land 292,000 60,000
Buildings and equipment (net) 877,000 265,000
Copyright - 95,000
Total assets $ 2,867,000 $ 948,000

Accounts payable $ (191,000) $ (148,000)

Notes payable (460,000) (130,000)
Common stock (300,000) (100,000)
Additional paid-in capital (450,000) (60,000)
Retained earnings (1,466,000) (510,000)
Total liabilities and equity $(2,867,000) $ (948,000)

Note: Credits are indicated by parentheses.

 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 04-34

ADAMS CORPORATION AND BARSTOW, INC.

- Purchase price allocation and excess amortizations

Consideration transferred by Adams $ 603,000

Noncontrolling interest fair value 67,000
Acquisition-date total fair value $ 670,000 Correct!
Book value of Barstos (460,000)
Excess fair value over book value $ 210,000 Correct!

Annual
Life Excess
(years) Amortizations
Land $ 30,000 - -
Buildings (20,000) 10 $ (2,000)
Equipment 40,000 5 8,000
Patents 50,000 10 5,000
Notes payable 20,000 5 4,000
Goodwill 120,000 indefinite -
Total $ 90,000 $ 15,000
Correct! Correct!
 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 04-34

ADAMS CORPORATION AND BARSTOW, INC.

Consolidation Worksheet
For Year Ending December 31, 2006
Non-
Adams Barstow controlling Consolidated
Accounts Corp. Inc. Debit Credit Interest Totals
Revenues $ (940,000) $ (280,000) $ (1,220,000)
Cost of goods sold 480,000 90,000 570,000
Depreciation expense 100,000 55,000 [E] 6,000 161,000
Amortization expense - [E] 5,000 5,000
Interest expense 40,000 15,000 [E] 4,000 59,000
Investment income (108,000) [I] 108,000 -
Separate company net income (428,000) (120,000)
Consolidated net income (425,000)
Income to noncontrolling interest (10,500) 10,500
Income to controlling interest (414,500)

Retained earnings, 1/1 $ (1,367,000) $ (340,000) [*C] 13,500 $ (1,353,500)

340,000
Controlling interest net income (428,000) (120,000) (414,500)
Dividends paid (110,000) (70,000) [D] 63,000 7,000 110,000
Retained earnings, 12/31 $ (1,685,000) $ (530,000) $ (1,658,000)

Current assets $ 610,000 $ 250,000 $ 860,000

Investment in Barstow, Inc. 702,000 [D] 63,000 [*C] 13,500 -
[S] 468,000
[A] 175,500
[I] 108,000
Land 380,000 150,000 [A] 30,000 560,000
Buildings 490,000 250,000 [E] 2,000 [A] 18,000 724,000
Equipment 873,000 150,000 [A] 32,000 [E] 8,000 1,047,000
Patents [A] 45,000 [E] 5,000 40,000
Goodwill [A] 90,000 90,000
Total assets $ 3,055,000 $ 800,000 $ 3,321,000

Notes payable (860,000) (230,000) [A] 16,000 [E] 4,000 (1,078,000)

Common stock (510,000) (180,000) [S] 180,000 (510,000)
Retained earnings, 12/31 (1,685,000) (390,000) (1,658,000)
Noncontrolling interest [S] 52,000
[A] 19,500 (71,500) (75,000)
Total liabilities and equity $ (3,055,000) $ (800,000) $ (3,321,000)

Parentheses indicate a credit balance.

Correct!
Correct!
Correct!
Correct!
Correct!
Correct!

Correct!
Correct!
Correct!

Correct!

Correct!
Correct!
Correct!

Correct!
Correct!

Correct!
Correct!
Correct!
Correct!
Correct!
Correct!

Correct!
Correct!
Correct!

Correct!
Correct!
Given Data P04-33

Barstow, Inc. outstanding voting shares 90%

acquired by Adams Corporation
Cash paid by Adams Corporation for $ 603,000
Barstow, Inc. shares

Barstow account values on 12/31/09

Book Fair Market
Value Value
Current assets $ 160,000 $ 160,000
Land 120,000 150,000
Buildings (10-year life) 220,000 200,000
Equipment (5-year life) 160,000 200,000
Patents (10-year life) - 50,000
Liabilities (5-year life) (200,000) (180,000)
Common stock (180,000)
Retained earnings, 12/31/09 (280,000)

Adams Barstow, Inc.

Corporation Corporation
12/31/2011 12/31/2011
Debits
Current assets $ 610,000 $ 250,000
Land 380,000 150,000
Buildings 490,000 250,000
Equipment 873,000 150,000
Investment in Barstow, Inc. 702,000 -
Cost of goods sold 480,000 90,000
Depreciation expense 100,000 55,000
Interest expense 40,000 15,000
Dividends paid 110,000 70,000
Total debits $ 3,785,000 $ 1,030,000

Credits
Notes Payable 860,000 230,000
Common stock 510,000 180,000
Retained earnings, 1/1/11 1,367,000 340,000
Revenues 940,000 280,000
Investment income 108,000 -
Total credits $ 3,785,000 $ 1,030,000
soal 31 TELCONNECT
Entry E untuk mengakui amortisasi patent
Amortization Expense $6,000.00
Patent $ 6,000.00
DWI OKTAFIANI 058

Entry A untuk mengakui unamortized (kelebihan nilai wajar yg belum diamortisasi)

Patent $ 18,000.00
Goodwill $ 190,000.00
investment in bandmor company (70%) $ 145,600.00
noncontroling interest in bandmor company (30%) $ 62,400.00
SISKA DEWI S 090

Entry D untuk mengeliminasi intra-entity dividend

Investment in Bandmor $ 42,000.00
Dividend Declared $ 42,000.00
70%*60000
ARTYANDI 035

Entry I untuk mengakui investasi

equity in Bandmor earnings $ 72,800
investment in bandmor $ 72,800
(70% x (110.000-6000)
MUTIA DWI LESTARI 025

Entry S untuk mengeliminasi/menyesuaikan proses akuisisi

Common Stock in Bandmor (subsidiary) $ 300,000.00
Retained Earnings in Bandmor (Subsidiary) $ 268,000.00
Investment in Bandmor 70 % * (CS + RE) = 70%* (300,000+268,000) $397,600.00
Noncontroling interest in Bandmor 30 % $170,400.00

Eko Wardoyo 194

Entry P untuk eliminate the intra-entity receivable and payable

Liabillities $ 22,000.00
Current Asset $ 22,000.00
281000-143.000
Dina Ratna 156

Entry *C (initial value method)

Investment in Bandmor (88000*70%)-(6000*70%*2)= $ 53,200.00
Retained Earnings $ 53,200.00

Entry *C (partial equity method)

Retained Earnings 6000*70%*2= $ 8,400.00
Investment in Bandmor $ 8,400.00

Ronaldo K. Ginting Manik 042

laba noncontrolling interest 2015

(110000-6000)x30% 31200

nilai sekarang NCI 210000

adjustment to original basis 69000
2013 20700
laba bersih30% x75000-6000 20700
dividen 30%x39000 11700
 2014 9000
laba bersih30% x96000-6000 27000
dividen 30%x44000 13200
2015 13800
laba bersih30% x110000-6000 31200
dividen 30%x60000 18000
13200
246000