AMORTIZATION

BV FV (UNDER) OVER
Inventory 16,100 18,100 -2,000
Equipment 12,000 30,000 -18,000
Patents 4,000 6,000 -2,000
Land 57,000 80,000 -23,000

GOODWILL

TOTAL
Investment in Subsidiary
Less: BV of net asset acquired
Common Stock 50,000
APIC 15,000
Retained Earnings 41,000
Total 106,000
Interest
Book Value
Excess
Adjustments:
Inventory -2,000
Equipment -18,000
Patent -2,000
Land -23,000
Total -45,000
Goodwill

Amortization
All. Excess 2011 2012+
Inventory 2,000 2,000
Equipment 18,000 6,000 6,000
Patents 2,000 500 500
8,500 6,500
 0.90
PARENT
160,500.00

106,000.00
0.90
95,400.00
65,100.00

-1,800.00 -200.00
-16,200.00 -1,800.00
-1,800.00 -200.00
-20,700.00 -2,300.00
-40,500.00 -4,500.00
24,600.00
YEAR 1
PARENT ENTRIES

a. Investment In Subsidiary 160,500

Common Stock 97,200
APIC 63,300

b. OPEX 16,000
APIC 17,000
Cash 33,000

c. Cash 108,000
Dividend Income 108,000

d. Inventory -subsidiary 304,000.00

Cash 304,000.00

e. Cash 1,800,000.00
Sales 1,800,000.00

f. COGS 990,000.00
Inventory 990,000.00

g. OPEX/Depn. Exp. -Equipment 17,900

Accumulated Depreciation- Equipment 17,900

1-Jul
h. Equipment 50,000
Cash 50000

i. OPEX/Depn. Exp. -Equipment 10000

Accumulated depreciation- eqp. 10000

1-Aug
j. Land 82,000
Cash 82000

OPEX 264100
Cash 264100
SUBSIDIARY ENTRIES

a. Cash 304,000
Sales - Intercomp Transac 304000

b. Cost of goods sold - Intercomp transac 167200

Inventory 167200

c. Cash 456000
Sales - Outsider 456000

d. Cost Of Good Sold - Outsider 250800

Inventory 250800

e. Dividends Declared 120,000

Cash 120,000

1-Aug
f. Cash 82,000
Land 57,000
Gain on sale on land 25,000

1-Jul
g. Cash 50,000
Accumulated Depreciation- Equipment 30,000
Equipment 40,000
Gain on sale on equipment 40,000

h. OPEX/Depn. Exp. -Equipment 2,000

OPEX/Amort. Exp. -Patent 1,000
Accumulated Depreciation- Equipment 2,000
Accumulated Amortization- Patent 1000

ELIMINATION ENTRIES

1 Dividend Income 108,000

NCI 12,000
Dividend Declared -subsidiary 120,000
2 Common Stock 50,000
APIC 15,000
Retained Earnings 41,000
Investment In Subsidiary 95,400
NCI 10,600

3 Inventory 2,000
Goodwill 24,600
Equipment 18,000
Land 23,000
Patent 2,000
Investment In Subsidiary 65,100
NCI 4,500

4 Cost Of Good Sold 2,000

Operating Expenses 8,960
Accumulated amortization- patents 500
Accumulated depreciation- eqp. 6,000
Inventory 2,000
Goodwill 2,460

5 Sales - Intercomp 304,000

Cost of Goods Sold 304,000

6 Cost of good sold Intercomp 34200

Inventory 34200

7 NCI in CI of Subsidiary 15,730

NCI 15,730

CI of Subsidiary 257,000
Unrealized Gain: Inventory 34,200
Equipment 40,000
Land 25,000
Realized gain - Equipment 8,000
Amortization -8,500
Adjusted CI 157,300
0.10
NCI share 15,730

8 Gain on sale of land 25,000

 Land 25,000

9 Gain on sale of equipment 40,000

Accumulated Depreciation- Equipment 30,000
Equipment 10,000

Cash -Parent Cash -Subsidiary

138900 33,000 20400 120000
50,000 Purchases to outsider 257000 25000
1800000 304,000 739100 40000
82000 82000
264100 50000
1938900 1,472,200 2000
466700 1000
412400 185000
227400

Inv. -Parent Inv. -Subsidiary

22900 16100
304000
326900 0 16100
326900

Equipment -Parent Equipment -Subsidiary

179000 40000 40000
50000
229000 0

Land -Parent Land -Subsidiary

40,000 57,000 57,000
82,000
122,000

AD -eqp -Parent AD -eqp -Subsidiary

107400 30,000 28,000
17900 2,000
 10000
135300

AD -pat -Subsidiary
6,000
1,000
7,000

CS
100,000
97200
 Accum dep- equip 8,000
OPEX 8,000

qp -Subsidiary
at -Subsidiary
YEAR 1
PARENT SUBSIDIARY

STATEMENT OF COMPREHENSIVE INCOME

Sales 1,800,000 760,000
Dividend Income 108,000 -
Gain on sale of land 25,000
Gain on sale of equipment 40,000
TOTAL REVENUE 1,908,000 825,000
Cost of Sales 990,000 418,000

Operating Expenses 308,000 150,000

Total Cost and Expenses 1,298,000 568,000
Net/Consolidated Comprehensive Income 610,000 257,000
NCI in CI of Subsidiary
Comprehensive Income to Retained Earnings 610,000 257,000

STATEMENT OF RETAINED EARNINGS

Retained Earnings, beg. 48,000 41,000

CI from ABOVE 610,000 257,000

Total 658,000 298,000
Dividends Declared 120,000
Retained Earnings, end to Balance Sheet 658,000 178,000

STATEMENT OF FINANCIAL POSITION

Cash 466,700 227,400
Accounts Receivable 34,200 9,100
Inventories 76,000 16,100

Equipment 229,000
Patents 10,000
Land 122,000
Investment in Subsidiary 160,500

Goodwill
Total Debits 1,088,400 262,600

Accum. depn. - equipment 135,300

Accum. depn. - patents 7,000
Accounts Payable 4,000 12,600
Bonds Payable 32,600
Common Stock 197,200 50,000
APIC 61,300 15,000
Retained Earnings, end 658,000 178,000
NCI

Total Credits 1,088,400 262,600

- -
ELIMINATIONS AND ADJUSTMENTS CONSOLIDATED
DR. CR.

304,000 5 2,256,000
108,000 1 -
25,000 8 -
40,000 9 -
2,256,000
2,000 4 304,000 5 1,140,200
34,200 6 - 10
8,960 4 8,000 458,960
1,599,160
656,840
15,730 7 -15,730
641,110

41,000 2 48,000
- 10
641,110
689,110
120,000 1 -
689,110

694,100
43,300
2,000 3 2,000 4 57,900
34,200 6
18,000 3 10,000 9 237,000
2,000 3 12,000
23,000 3 25,000 8 120,000
95,400 2
65,100 3
24,600 3 2,460 4 22,140
1,186,440

8,000 6,000 4 163,300

30,000 9
 500 4 7,500
16,600
32,600
50,000 2 197,200
15,000 2 61,300
689,110
12,000 1 10,600 2 18,830
- 10 4,500 3
15,730 7
733,490 733,490 1,186,440

-
-
 #54
#55 18,830
#56 641,110
#57 689,110
#58 48,000
#59 966,440
#60 458,960
#61 1,140,200

PARENT SUBSIDIARY
ASSETS
Cash 30,900 20,400
Accounts receivable (net) 34,200 9,100
Inventories 22,900 16,100 17,900
Equipment -10 years 179,000 40,000 4
Accumulated Depreciation 107,400 28,000
Patents - 10 years 10,000
Accumulated Depreciation 6,000
Land 40,000 57,000
TOTAL ASSETS 199,600 118,600

LIABILITIES & SHE

Accounts payable 4,000 12,600
Notes payable 32,600
Common Stock, P10 par 100,000 50,000
APIC 15,000 15,000
Retained Earnings 48,000 41,000
TOTAL LIABILITIES & SHE 199,600 118,600

MARKET VALUES
Inventories (FIFO method) 18,100
Equipment 30,000
Patents 6,000
Land 80,000
Goodwill (Impairment 10% per year)

2011 2012
PARENT SUBSIDIARY PARENT
INCOME STATEMENTS
Sales 1,800,000 760,000 1,800,000
Dividend Income 108,000 135,000

Income Credits 1,908,000 760,000 1,935,000

Cost of sales 990,000 418,000 1,080,000
Operating Expenses 308,000 150,000 300,000
Income Debits 1,298,000 568,000 1,380,000
Net Income 610,000 192,000 555,000
 4,000
3
1,000
4

2012
SUBSIDIARY
900,000

900,000
540,000
180,000
720,000
180,000
 YEAR 2
PARENT ENTRIES

a. Cash 135,000
Dividend Income 135,000

b. Depreciation Expense- Equipment 17,900

Accumulated Depreciation- Equip 17,900

ELIMINATION ENTRIES

1 Dividend Income 135,000

NCI 15,000
Dividend Declared - subsidiary 150,000

2 Common Stock 50,000

APIC 15,000
Retained Earnings 41,000
Investment In Subsidiary 95,400
NCI 10,600

3 Inventory 4,000
Equipment 10,000
Goodwill 54,300
Patent 2,000
Investment In Subsidiary 65,100
NCI 1,200

4 Retained Earnings - Jan. 1 10,847

Operating Expenses 6,847
Accumulated amortization- patents 500
Inventory 4,000
Accumulated Depreciation- eqp. 3,334
Goodwill 10,860

5 Retained Earnings - Jan. 1 5,458

NCI 5,458

Retained Earnings, Jan1, 2011 101,000

Retained Earnings, Jan1, 2012 41,000
60,000
 Amortization -8,500
51,500
0.10
5,150

6 NCI in CI of Subsidiary 31,858

NCI 31,858

#54 CI of Subsidiary 320,000

Amortization -6,500
Adjusted CI 313,500
0.10
NCI share 31,350

#55 34,116
#56 781,295
#57 1,482,990
#58 701,695
#59 1,775,606
#60 486,847
#61 1,400,000

YEAR 2
PARENT SUBSIDIARY ELIMINATIONS AND ADJUSTMENTS CONSOLIDATED
DR. CR.
STATEMENT OF COMPREHENSIVE INCOME
Sales 1,800,000 900,000 2,700,000
Dividend I 135,000 135,000 1 -
Total Reven 1,935,000 900,000 2,700,000
Cost of Sale 1,000,000 400,000 1,400,000
Operating E 300,000 180,000 6,847 4 486,847
Total Cost 1,300,000 580,000 1,886,847
Net/Consol 635,000 320,000 813,153
NCI in CI of Subsidiary 31,858 6 -31,858
Comprehensi 635,000 320,000 781,295

STATEMENT OF RETAINED EARNINGS

Retained Ea 658,000 101,000 41,000 2 701,695
10,847 4
 5,458 5
CI from AB 635,000 320,000 781,295
Total 1,293,000 421,000 1,482,990
Dividends Declared 150,000 150,000 1 -
Retained Ea 1,293,000 271,000 1,482,990

STATEMENT OF FINANCIAL POSITION

Cash 1,119,600 402,400 1,522,000
Accounts Re 34,200 9,100 43,300
Inventories 22,900 16,100 4,000 3 4,000 4 39,000
Equipment 179,000 40,000 10,000 3 229,000
Patents 10,000 2,000 3 8,000
Investment 160,500 95,400 2
65,100 3
Goodwill 54,300 3 10,860 4 43,440
Total Debits 1,516,200 477,600 1,884,740

Accum. depn 89,500 24,000 3,334 4 116,834

Accum. depn. - patents 4,000 500 4 3,500
Accounts Pa 4,000 8,600 12,600
Bonds Payab 66,300 66,300
Common St 197,200 50,000 50,000 2 197,200
APIC 61,300 15,000 15,000 2 61,300
Retained Ea 1,293,000 271,000 1,482,990
NCI in CI of Subsidiary 15,000 1 10,600 2 34,116
1,200 3
5,458 5
31,858 6
Total 1,711,300 372,600 379,810 379,810 1,974,840
ONSOLIDATED