Bryle Jay P.

Lape

Let’s Check.

1.
Dividend income 10,000
Dividends declared – Short Company 10,000
To eliminate inter-company dividends.

Common stock – Short Company 100,000

Retained earnings, 1/1– Short Company 50,000
Investment in Short Company 150,000
To eliminate equity accounts of Short Company at date of
acquisition.

Depreciable assets 30,000

Investment in Short Company 30,000
To allocate excess.

Depreciation expense (30,000/6 yrs) 5,000

Depreciable asset 5,000
To amortize allocated excess.

2.
Pony Corporation and Subsidiary
Working Paper for Consolidated Financial
Statements Year Ended December 31, 2020
Pony Short Eliminations & Consolidated
Corporatio Compan Adjustments
n y Debit Credit
Statement of CI
Sales 200,000 120,000 320,000
Dividend income 10,000 (1) 10,000 -
Total revenue 210,000 120,000 320,000
Depreciation expense 25,000 15,000 (4) 5,000 45,000
Other expenses 105,000 75,000 180,000
Total costs and expenses 130,000 90,000 225,000
CI, carried forward 80,000 30,000 95,000
Statement of
Retained Earnings
Retained earnings, 1/1 230,000 50,000 (2) 50,000 230,000
CI from above 80,000 30,000 95,000
Total 310,000 80,000 325,000
Dividends declared 40,000 10,000 (1) 10,000 40,000
Retained earnings, 12/31
Carried forward 270,000 70,000 285,000
Statement of FP
Cash 15,000 5,000 20,000
Accounts receivable 30,000 40,000 70,000
Inventory 70,000 60,000 130,000
Depreciable asset (net) 325,000 225,000 (3) 30,000 (4) 5,000 575,000
Investment in Short 180,000 (2) 150,000
Company
(3) 30,000 -
Total Assets 620,000 330,000 795,000
Accounts payable 50,000 40,000 90,000
Notes payable 100,000 120,000 220,000
Common stock:
Pony Corporation 200,000 200,000
Short Company 100,000 (2) 100,000
Retained earnings, 12/31
From above 270,000 70,000 285,000
Total Liabilities and equity 620,000 330,000 195,000 195,000 795,000