Chapter 4

Electronic Supplement Solutions

W-1 The method used by a parent company in accounting for its subsidiary can be determined by
examining the separate financial statements of the parent company and the subsidiary. If the cost
method is used, the parent company will report dividend income from the subsidiary and the
investment account will be stated at original cost. If the equity method is used, the parent company
will report investment income from the subsidiary, and the investment account will reflect
subsidiary income since acquisition. When the equity method is used but the difference between
investment cost and book value acquired has not been amortized on the parent company's books, the
difference between the investment balance and underlying book value at any statement date will
reflect the difference between the investment cost and underlying book value at the time of
acquisition.

W-2 When the cost method is used, reciprocity between the investment account balance and the
underlying subsidiary equity is established by adjusting the parent company's investment and
retained earnings accounts for the parent's share of the change in subsidiary retained earnings
between the dates the subsidiary was acquired and the beginning of the current year.

85
86 Consolidation Techniques and Procedures

W-3

1 Cost method
Cash $30,000
Dividend income $30,000
To record receipt of dividends ($40,000 x 75%).

2 Cost method

Investment cost January 1, 2005 $300,000

Less: Dividends in excess of earnings ($30,000 - $10,000) x 75% (15,000)
Investment account balance - cost method $285,000

3 Equity method
Investment in S’Brain $45,000
Income from S’Brain $45,000
To record share of S’Brain's net income ($60,000 x 75%).

Cash $30,000
Investment in S’Brain $30,000
To record receipt of dividends ($40,000 x 75%).

4 Investment balance under equity method

Investment cost $300,000

Add: Share of income for 2005 and 2006 ($70,000 x 75%) 52,500
Less: Share of dividends for 2005 and 2006 ($70,000 x 75%) (52,500)
Investment in S’Brain balance December 31, 2006 $300,000

5 Consolidated net income

Pinky's separate income $ 90,000

Add: Investment income 45,000
Consolidated net income $134,000
Chapter 4 87

W-4 [AICPA adapted]

1 a

Investment cost $145,000

Add: Excess of book value acquired over cost 7,000
Book value of 80% interest acquired $152,000
Book value of 100% interest ($152,000  80%) $190,000

2 d

There is no way to determine the components of the subsidiary's stockholders'

equity from the information given.

3 d

The minority interest represents 20% of the current stockholders' equity of

the subsidiary. Thus, total stockholders' equity must be $29,200  20%, or
$146,000.

4 d

There is no way to determine the components of the subsidiary's stockholders'

equity from the information given.

5 c

Consolidated - Parent = Subsidiary

Current assets $363,000 $218,000 $145,000
Current liabilities 150,000 83,000 67,000
Working capital $213,000 $135,000 $ 78,000
88 Consolidation Techniques and Procedures

W-5

Cost method

1a Investment balance December 31, 2003 (original cost) $160,000

1b Consolidated net income under cost method

Net income of Photronic $120,000

Less: Dividend income from Silicon ($25,000 x 80%) (20,000)
Separate income of Photronic 100,000
Add: Photronic's share of Silicon's income ($60,000 x 80%) 48,000
Consolidated net income $148,000

Equity method

2a Investment in Silicon December 31, 2003

Cost January 1, 2003 $160,000

Add: Income from Silicon
48,000
Less: Dividends from Silicon (20,000)
Investment in Silicon under equity method $188,000

2b Consolidated net income (equal to Phototronic's income) $120,000

2c Minority interest December 31, 2003

Silicon's equity January 1, 2003 $200,000

Add: Net income 60,000
Deduct: Dividends (25,000)
Silicon's equity at December 31, 2003 235,000
Minority interest percentage 20%
Minority interest December 31, 2003 $ 47,000
Chapter 4 89

W-6

1 Pane Company
Balance Sheet
at December 31, 2003

Assets Liabilities and Stockholders' Equity

Cash $ 2,500 Liabilities $ 80,000
Accounts receivable 15,000 Stockholders' equity:
Other assets 120,000 Capital stock $100,000
Investment in Sizzle 88,000 Paid-in excess 10,000
Retained earnings 35,500 145,500
Total assets $225,500 Total equities $225,500

2 Pane Company and Subsidiary

Consolidated Income Statement
for the year ended December 31, 2003

Sales $190,000
Cost of goods sold 80,000
Gross profit 110,000
Operating expenses 65,000
Total consolidated net income 45,000
Less: Minority interest incomeb 4,000
Consolidated net income $ 41,000
b
Minority interest income is 20% of Sizzle's $20,000 income.

3 Pane Company and Subsidiary

Consolidated Balance Sheet
at December 31, 2003

Assets Liabilities and Stockholders' Equity

Cash $ 17,500 Liabilities $110,000
Accounts receivable 40,000 Stockholders' equity:
Other assets 220,000 Capital stock $100,000
Goodwilla 8,000 Paid-in excess 10,000
Retained earningsb 43,500
Minority interestc 22,000 175,500
Total assets $285,500 Total equities $285,500
a
(Cost $88,000 - book value acquired $80,000)
b
Retained earnings-Pane January 1, 2003 of $22,500 plus consolidated net
income of $41,000 less dividends of Pane of $20,000.
c
Minority interest January 1, 2003 of $20,000 plus minority interest income
of $4,000 less minority interest dividends of $2,000.
90 Consolidation Techniques and Procedures

W-7

Prim Corporation and Subsidiary

Consolidation Working Papers
for the year ended December 31, 2003

| | | Adjustments and |Consolidated

| Prim | Stan 100% | Eliminations | Statements
| | | | |
Income Statement | | | | |
Sales |$1,900,000 |$1,000,000 | | | $2,900,000
Income from Stan | 200,000 | |c 200,000| |
Cost of sales | 800,000*| 400,000*| | | 1,200,000*
Depreciation expense | 200,000*| 100,000*| | | 300,000*
Interest expense | 200,000*| | | | 200,000*
Operating expenses | 400,000*| 300,000*| | | 700,000*
Net income |$ 500,000 |$ 200,000 | | | $ 500,000
| | | | |
Retained Earnings | | | | |
Retained earnings-Prim|$1,300,000 | | | | $1,300,000
Retained earnings-Stan| |$ 400,000 |d 400,000| |
Net income | 500,000 | 200,000 | | | 500,000
Dividends | 400,000*| 150,000*| |c 150,000| 400,000*
Retained earnings | | | | |
December 31, 20X8 | $1,400,000 |$ 450,000 | | | $1,400,000
| | | | |
Balance Sheet | | | | |
Cash |$ 150,000 |$ 60,000 |a 10,000| | $ 220,000
Receivables -net | 350,000 | 140,000 | |a 10,000| 480,000
Inventories | 1,000,000 | 150,000 | | | 1,150,000
Land | 600,000 | 100,000 | | | 700,000
Buildings -net | 1,500,000 | 500,000 | | | 2,000,000
Equipment -net | 1,900,000 | 800,000 | | | 2,700,000
Investment in Stan | 1,500,000 | | |b 50,000|
| | | |c 50,000|
| | | |d 1,400,000|
Dividends receivable | | |b 50,000|e 50,000|
|$7,000,000 |$1,750,000 | | | $7,250,000
| | | | |
Accounts payable |$ 400,000 |$ 250,000 | | | $ 650,000
Dividends payable | 100,000 | 50,000 |e 50,000| | 100,000
Bond interest payable | 100,000 | | | | 100,000
10% bonds payable | 2,000,000 | | | | 2,000,000
Common stock $10 par | 2,500,000 | 1,000,000 |d 1,000,000| | 2,500,000
Other paid -in capital | 500,000 | | | | 500,000
Retained earnings | 1,400,000 | 450,000 | | | 1,400,000
|$7,000,000 |$1,750,000 | | | $7,250,000
| | | | |
*Deduct
Chapter 4 91

W-8

Preliminary computations
Investment cost $100,000
Book value acquired ($100,000 x 70%) 70,000
Excess cost over book value acquired $ 30,000

Excess allocated to:

Inventories (sold in 2006) $ 10,000
Patents (amortized over 10 years at $2,000 per year) 20,000
Excess cost over book value acquired $ 30,000

Conversion to equity method

Retained Investment Income
Earnings-Phil in Simm from Simm
Prior-year effect
Excess allocated to inventory $(10,000) $(10,000)
Patent amortization 2006 and 2007 (4,000) (4,000)
Current-year effect
Patent amortization (2,000) $(2,000)
Adjustment $(14,000) $(16,000) $(2,000)

Working paper entries in journal form

a Income from Simm $ 2,000

Retained earnings-Phil 14,000
Investment in Simm $ 16,000
To correct investment income, the investment in Simm account and
retained earnings for amortization of cost-book value
differentials.

b Income from Simm $ 19,000

Dividends $ 14,000
Investment in Simm 5,000
To eliminate income and dividends from Simm and return the
investment account to its beginning-of-the-period balance.

c Retained earnings-Simm $ 40,000

Capital stock-Simm 80,000
Patents 16,000
Investment in Simm $100,000
Minority interest December 31, 2007 36,000
To eliminate reciprocal equity and investment balances, establish
beginning minority interest, and enter unamortized patents.

d Other expenses $ 2,000

Patents $ 2,000
To enter current patent amortization.
e Minority Interest Expense $ 9,000
Dividends-Simm $ 6,000
Minority Interest 3,000
92 Consolidation Techniques and Procedures

To enter minority interest share of subsidiary income and

dividends
Chapter 4 93

W-8 (continued)

Conversion to equity as first working paper entry:

Phil Corporation and Subsidiary

Consolidation Working Papers
for the year ended December 31, 2008
___________________________________________________________________________
| | | Adjustments and |Consolidated
| Pitt |Simm 80% | Eliminations |Statements__
| | | | |
Income Statement | | | | |
Sales |$500,000 |$100,000 | | |$600,000
Income from Simm | 21,000 | |a 2,000| |
| | |b 19,000| |
Cost of sales | 240,000*| 40,000*| | | 280,000*
Other expenses | 174,000*| 30,000*|d 2,000| | 206,000*
Minority expense | | |e 9,000| | 9,000*
Net income |$107,000 |$ 30,000 | | |$105,000
| | | | |
Retained Earnings | | | | |
Retained earnings -Phil|$110,000 | |a 14,000| |$ 96,000
Retained earnings -Simm| |$ 40,000 |c 40,000| |
Net income | 107,000 | 30,000 | | 105,000
Dividends | 70,000*| 20,000*| |b 14,000|
|e 6,000 | 70,000*
Retained earnings | | | | |
December 31, 2008 | $147,000 |$ 50,000 | | |$131,000
| | | | |
Balance Sheet | | | | |
Cash |$ 56,000 |$ 30,000 | | |$ 86,000
Accounts receivable | 40,000 | 20,000 | | | 60,000
Inventories | 60,000 | 15,000 | | | 75,000
Plant assets -net | 220,000 | 105,000 | | | 325,000
Investment in Simm | 121,000 | | |a 16,000|
| | | |b 5,000|
| | | |c 100,000|
Patents | | |c 16,000|d 2,000| 14,000
|$497,000 |$170,000 | | |$560,000
| | | | |
Accounts payable |$ 50,000 |$ 40,000 | | |$ 90,000
Capital stock | 300,000 | 80,000 |c 80,000 | | 300,000
Retained earnings | 147,000 | 50,000 | | | 131,000
|$497,000 |$170,000 | | |
Minority interest January 1, 2008 | |c 36,000|
Minority interest December 31, 2008 | |e 3,000| 39,000
| | | $560,000
| | | |
*Deduct
94 Consolidation Techniques and Procedures

W-8 (continued)

Alternative solution - no initial conversion to equity

Working paper entries in journal form

a Income from Simm $ 21,000

Dividends $ 14,000
Investment in Simm 7,000
To establish reciprocity as of the beginning of the period. [This
entry eliminates the investment increase for 2008 as it was
reported in Phil's books against the dividends received from Simm,
and credits the investment account for the difference. The
investment account balance is now the beginning-of-the-period
balance.]

b Retained earnings-Phil $ 10,000

Capital stock-Simm 80,000
Retained earnings-Simm 40,000
Patents 20,000
Investment in Simm $114,000
Minority interest January 1, 2008 36,000
To eliminate reciprocal investment and equity amounts, establish
beginning minority interest, enter the original patents, and
charge Pitt's retained earnings for the excess allocated to
inventories.

c Retained earnings-Phil $ 4,000

Other expenses 2,000
Patents $ 6,000
To enter the current year's patent amortization and charge Phil's
retained earnings for patent amortization for 2006 and 2007.

d Minority Interest Expense $ 9,000

Dividends-Simm $ 6,000
Minority Interest 3,000

To enter minority interest share of subsidiary income and

dividends
Chapter 4 95

W-8 (continued)

Alternative solution - no initial conversion to equity

Phil Corporation and Subsidiary

Consolidation Working Papers
for the year ended December 31, 2008
___________________________________________________________________________
| | | Adjustments and |Consolidated
| Pitt |Simm 80% | Eliminations |Statements__
| | | | |
Income Statement | | | | |
Sales |$500,000 |$100,000 | | | $600,000
Income from Simm | 21,000 | |a 21,000| |
Cost of sales | 240,000*| 40,000*| | | 280,000*
Other expenses | 174,000*| 30,000*|c 2,000| | 206,000*
Minority expense | | |d 9,000| | 9,000*
Net income |$107,000 |$ 30,000 | | | $105,000
| | | | |
Retained Earnings | | | | |
Retained earnings-Phil|$110,000 | |b 10,000| |
| | |c 4,000| | $ 96,000
Retained earnings -Simm| |$ 40,000 |b 40,000| |
Net income | 107,000 | 30,000 | | | 105,000
Dividends | 70,000*| 20,000*| |a 14,000|
|d 6,000| 70,000*
Retained earnings | | | | |
December 31, 20X8 | $147,000 |$ 50,000 | | | $131,000
| | | | |
Balance Sheet | | | | |
Cash |$ 56,000 |$ 30,000 | | | $ 86,000
Accounts receivable | 40,000 | 20,000 | | | 60,000
Inventories | 60,000 | 15,000 | | | 75,000
Plant assets -net | 220,000 | 105,000 | | | 325,000
Investment in Simm | 121,000 | | |a 7,000|
| | | |b 114,000|
Patents | | |b 20,000|c 6,000| 14,000
|$497,000 |$170,000 | | | $560,000
| | | | |
Accounts payable |$ 50,000 |$ 40,000 | | | $ 90,000
Capital stock | 300,000 | 80,000 |b 80,000| | 300,000
Retained earnings | 147,000 | 50,000 | | | 131,000
|$497,000 |$170,000 | | |
Minority interest January 1, 2008 | |b 36,000|
Minority interest December 31, 2008 | |d 3,000| 39,000
| | | $560,000
| | | |
*Deduct
96 Consolidation Techniques and Procedures

W-9

Supporting computations

Investment cost January 1, 2005 $200,000

Book value acquired ($225,000 x 60%) 135,000
Excess cost over book value $ 65,000

Excess allocated to:

Machinery ($50,000 undervaluation x 60%) $ 30,000
Remainder to patents 35,000
Excess cost over book value $ 65,000

Amortization Unamortized at
2005 2006 December 31, 2006
Machinery $30,000/4 years $7,500 $7,500 $15,000
Patents $35,000/10 years 3,500 3,500 28,000

Consolidated net income:

Puff's separate income ($116,000 - $6,000 dividends from Scot) $110,000

Add: Income from Scot ($60,000 x 60%) - $11,000 amortization 25,000
Consolidated net income $135,000

Investment in Scot (equity basis):

Investment cost January 1, 2005 $200,000

Share of retained earnings increase for 2005
($50,000 - $25,000) x 60% 15,000
Less: Amortization for 2005 (11,000)
Investment in Scot December 31, 2005* 204,000
Share of Scot's income for 2006 ($60,000 x 60%) 36,000
Less: Amortization for 2006 (11,000)
Less: Dividends for 2006 ($20,000 x 60%) (12,000)
Investment in Scot December 31, 2006 (under the equity method) $217,000

*On December 31, 2005 the investment in Scot is $204,000 on an equity basis
and $200,000 on the cost basis. The $4,000 difference is the result of
applying the cost rather than the equity method in 2005. A working paper
entry for $4,000 is needed to increase the investment in Scot and the
beginning retained earnings of Puff to an equity basis. This working paper
entry adjusts Puff's beginning retained earnings of $112,000 to $116,000, the
correct amount of beginning consolidated retained earnings.
Chapter 4 97

W-9 (continued)

Working paper entries in general journal form:

a Dividends receivable $ 6,000

Dividends from Scot $ 6,000
Error correction -- dividends declared but not recorded by Puff.

b Dividends from Scot $ 12,000

Dividends $ 12,000
Error correction from using the cost method.

c Investment in Scot $ 4,000

Retained earnings-Puff $ 4,000
To record equity in retained earnings increase of $15,000 from
2005 less $7,500 depreciation and less $3,500 patent amortization.

d Retained earnings-Scot $ 50,000

Capital stock-Scot 200,000
Plant and equipment-net 22,500
Patents 31,500
Investment in Scot $204,000
Minority interest 100,000
To eliminate reciprocal equity and investment balances and enter
patents, excess allocated to plant and equipment, and beginning
minority interest.

e Operating expenses $ 7,500

Plant and equipment-net $ 7,500
To record depreciation on excess allocated to plant and equipment.

f Operating expenses $ 3,500

Patents $ 3,500
To record amortization on excess allocated to patents.

g Dividends payable $ 6,000

Dividends receivable $ 6,000
To eliminate reciprocal balances.

h Accounts payable $ 5,000

Accounts receivable $ 5,000
To eliminate reciprocal balances.

i Minority Interest Expense $ 24,000

Dividends-Scot $ 8,000
Minority Interest 16,000

To enter minority interest share of subsidiary income and

dividends
98 Consolidation Techniques and Procedures
Chapter 4 99

W-9 (continued)

Puff Corporation and Subsidiary

Consolidation Working Papers
for the year ended December 31, 2006

| | | Adjustments and |Consolidated

| Puff |Scot 80% | Eliminations | Statements
Income Statement | | | | |
Net sales |$900,000 |$300,000 | | | $1,200,000
Dividends from Scot | 6,000 | |b 12,000|a 6,000|
Cost of goods sold | 600,000*| 150,000*| | | 750,000*
Operating expenses | 190,000*| 90,000*|e 7,500| |
| | |f 3,500| | 291,000*
Minority expense | | |i 24,000| | 24,000*
Net income |$116,000 |$ 60,000 | | | $ 135,000
| | | | |
Retained Earnings | | | | |
Retained earnings -Puff|$112,000 | | |c 4,000| $ 116,000
Retained earnings -Scot| |$ 50,000 |d 50,000| |
Net income | 116,000 | 60,000 | | | 135,000
Dividends | 100,000*| 20,000*| |b 12,000|
|i 8,000| 100,000*
Retained earnings | | | | |
December 31, 20X6 | $128,000 |$ 90,000 | | |$ 151,000
| | | | |
Balance Sheet | | | | |
Cash | 26,000 | 15,000 | | |$ 41,000
Accounts receivable | 26,000 | 20,000 | |h 5,000| 41,000
Inventories | 82,000 | 60,000 | | | 142,000
Other current assets | 80,000 | 5,000 | | | 85,000
Land | 160,000 | 30,000 | | | 190,000
Plant and | | | | |
equipment -net | 340,000 | 230,000 |d 22,500|e 7,500| 585,000
Investment in Scot | 200,000 | |c 4,000|d 204,000|
Dividends receivable | | |a 6,000|g 6,000|
Patents | | |d 31,500|f 3,500| 28,000
|$914,000 |$360,000 | | |$1,112,000
| | | | |
Accounts payable |$ 24,000 |$ 15,000 |h 5,000| |$ 34,000
Dividends payable | | 10,000 |g 6,000| | 4,000
Other liabilities | 62,000 | 45,000 | | | 107,000
Capital stock | 700,000 | 200,000 |d 200,000| | 700,000
Retained earnings | 128,000 | 90,000 | | | 151,000
|$914,000 |$360,000 | | |
Minority interest January 1, 2006 | |d 100,000|
Minority interest December 31,2006 | |i 16,000| 116,000
| | | $1,112,000
| | | |
*Deduct
100 Consolidation Techniques and Procedures

W-10

Preliminary computations

Cost-book value differential:

Investment cost July 1, 2003 $102,450
Book value acquired ($71,000 x 95%) 67,450
Excess cost over book value acquired $ 35,000

Allocation and amortization schedule:

Amortization Unamortized
Allocation 2003 - 2005 June 30, 2006
Plant and equipment (5-year life) $15,000 $ 9,000 $ 6,000
Patents (amortized over 10 years) 20,000 6,000 14,000
$35,000 $15,000 $20,000

Minority interest expense ($62,000 x 5%) $ 3,100

Pappa Bee's income from Sue Bee:

Share of reported income ($62,000 x 95%) $ 58,900
Less: Amortization for year 5,000
Income from Sue Bee $ 53,900

Consolidated net income:

Pappa Bee's separate income ($115,000 - $57,000 dividend income) $ 58,000
Add: Income from Sue Bee 53,900
Consolidated net income $111,900

1 Cost-to-Equity Conversion Schedule

Retained Investment Income Dividend

Earnings in Sue from Sue Income
Prior years' effect
95% of Sue Bee's change in
retained earnings
($81,000 - $21,000 x 95%) $57,000 $57,000
Amortization of excess:
Plant and equipment (9,000) (9,000)
Patents (6,000) (6,000)
Current year's effect
Reclassify dividend income
as a decrease in the
investment account (57,000) $(57,000)
Equity in Sue Bee's reported
income 58,900 $58,900
Less: Amortization (5,000) (5,000)
$42,000 $38,900 $53,900 $(57,000)
Chapter 4 101

W-10 (continued)

a Dividend income $ 57,000

Investment in Sue Bee 38,900
Retained earnings-Pappa Bee $ 42,000
Income from Sue Bee 53,900
To convert Pappa Bee's investment from cost to equity as explained
in the conversion to equity schedule.

b Income from Sue Bee $ 53,900

Investment in Sue Bee 3,100
Dividends $ 57,000
To eliminate income and dividends and return the investment
account to its beginning-of-the-period balance.

c Retained earnings-Sue Bee $ 81,000

Unamortized excess 20,000
Capital stock-Sue Bee 50,000
Investment in Sue Bee $144,450
Minority interest 6,550
To eliminate reciprocal equity and investment balances, and enter
the unamortized excess and beginning minority interest.

d Plant and equipment $ 15,000

Patents 14,000
Accumulated depreciation $ 9,000
Unamortized excess 20,000
To allocate the unamortized excess as of June 30, 2006.

e Other expenses $ 5,000

Accumulated depreciation $ 3,000
Patents 2,000
To enter current amortization of excess.

f Note payable-8% $100,000

Note receivable $100,000
To eliminate reciprocal note receivable and payable amounts.

g Interest payable $ 4,000

Interest receivable $ 4,000
To eliminate reciprocal interest receivable and payable amounts.
h Interest income $ 8,000
Interest expense $ 8,000
To eliminate reciprocal interest income and expense amounts.
i Dividends payable $ 14,250
Dividends receivable $ 14,250
To eliminate reciprocal dividends receivable and payable amounts.
j Minority Interest Expense $ 3,100
102 Consolidation Techniques and Procedures
Dividends-Scot $ 3,000
Minority Interest 100

To enter minority interest share of subsidiary income and

dividends
Chapter 4 103

W-10 (continued)

Pappa Bee Industries and Subsidiary

Consolidation Working Papers
for the year ended June 30, 2007

| | | Adjustments and |Consolidated

|Pappa Bee| Sue Bee | Eliminations | Statements
| | | | |
Income Statement | | | | |
Sales |$500,000 |$250,000 | | | $750,000
Dividend income | 57,000 | |a 57,000| |
Income from Sue Bee | | |b 53,900|a 53,900|
Interest income | 8,000 | |h 8,000| |
Cost of sales | 300,000*| 120,000*| | | 420,000*
Interest expense | | 8,000*| |h 8,000 |
Other expenses | 150,000*| 60,000*|e 5,000 | | 215,000*
Minority expense | | |j 3,100 | | 3,100*
Net income |$115,000 |$ 62,000 | | | $111,900
| | | | |
Retained Earnings | | | | |
Retained earnings | | | | |
-Pappa Bee |$148,000 | | |a 42,000 $190,000
-Sue Bee | |$ 81,000 |c 81,000 | |
Net income | 115,000 | 62,000 | | | 111,900
Dividends | 50,000*| 60,000*| |b 57,000|
|j 3,000 | 50,000*
Retained earnings | | | | |
June 30, 20X5 |$213,000 |$ 83,000 | | | $251,900
| | | | |
Balance Sheet | | | | |
Cash |$ 69,300 |$ 22,000 | | | $ 91,300
Accounts receivable | 60,000 | 30,000 | | | 90,000
Interest receivable | 4,000 | | |g 4,000|
Dividends receivable | 14,250 | | |i 14,250|
Other assets | 100,000 | 75,000 | | | 175,000
Plant and equipment | 300,000 | 200,000 |d 15,000| | 515,000
Accumulated | | | |d 9,000|
depreciation | 72,000*| 50,000*| |e 3,000| 134,000*
Investment in Sue Bee | 102,450 | |a 38,900|c 144,450|
| | |b 3,100| |
Note receivable | 100,000 | | |f 100,000|
Patents | | |d 14,000|e 2,000| 12,000
Unamortized excess | | |c 20,000|d 20,000|
|$678,000 |$277,000 | | | $749,300
| | | | |
Accounts payable |$ 40,000 |$ 25,000 | | | $ 65,000
Dividends payable | 25,000 | 15,000 |i 14,250| | 25,750
Interest payable | | 4,000 |g 4,000| |
Note payable -8% | | 100,000 |f 100,000| |
Capital stock | 400,000 | 50,000 |c 50,000| | 400,000
Retained earnings | 213,000 | 83,000 | | | 251,900
|$678,000 |$277,000 | | |
Minority interest June 30, 2006 | |c 6,550|
Minority interest June 30, 2007 | |j 100| 6,650
| | | $749,300
| | |
*Deduct