Bryle Jay P.

Lape

Let’s Analyze.

1.
Investment in Sally Wood Products Company 160,000
Cash 160,000
To record acquisition of Sally Wood Products Company stocks.

Cash 8,000
Dividend Income 8,000
To record share in dividends paid by Sally Company.

2.
Total Parent (80%) NCI (20%)
Fair value of subsidiary P200,000 160,000 40,000
Less: Book value of interest acquired:
Common Stock- Sally WP Company 100,000
Retained Earnings- Sally WP 50,000
Company
Total P150,000 P150,000 P150,000
Interest acquired 80% 20%
Book value P120,000 P30,000
Excess P50,000 P40,000 P10,000
Allocations (adjustment)
Buildings and Equipment (50,000)
--- -

Journal Entries:
Dividend Income 8,000
Non-controlling Interest 2,000
Dividends declared – Sally WP Company 10,000
To eliminate inter-company dividends and minority share of
dividends.

Common stock – Sally WP Company 100,000

Retained Earnings, 1/1 –Sally WP Company 50,000
Investment in Sally WP Company 120,000
Non-controlling Interest 30,000
To eliminate equity accounts of subsidiary and the investment
account for the parent’s share and recognize NCI on date of
acquisition.

Building and Equipment 50,000

Investment in Sally Products 40,000
Non-controlling Interest 10,000
To allocate excess.

Depreciation Expense (50,000/10 yrs.) 5,000

Accumulated depreciation– Building. & Equipment 5,000
To amortize allocated excess.
 Accounts Payable 10,000
Cash and Receivables 10,000
To record inter-corporate payable and receivables.

Non-controlling Interest in CI of Subsidiary 5,000

Non-controlling Interest 5,000
To recognize NCI in subsidiary’s adjusted net
income for 2020as follows:
CI of Subsidiary P 30,000
Amortization (5,000)
Adjusted CI of Subsidiary 25,000
NCI Share (P25, 000 x 20%) P 5,000

3.

Pilar Corporation and Subsidiary

Working Paper for Consolidated
Financial Statements Year Ended
December 31, 2020
Pilar Sally WP Eliminations & Consolidated
Corporation Company Adjustments
Debit Credit
Statement of CI
Sales 200,000 100,000 300,000
Dividend income 8,000 - (1) 8,000

Total revenue 208,000 100,000 300,000

Cost of Goods Sold 120,000 50,000 170,000
Depreciation expense 25,000 15,000 (4) 5,000 45,000
Inventory losses 15,000 5,000 20,000
Total costs and expenses 160,000 ,000 235,000
Net/ consolidated income 48,000 30,000 65,000
NCI in CI of subsidiary (6) 5,000 (5,000)
CI to RE 48,000 30,000 60,000
Statement of
Retained Earnings
Retained earnings, 1/1 298,000 90,000 (2) 50,000 338,000
CI from above 48,000 30,000 60,000
Total 346,000 120,000 398,000
Dividends declared 30,000 10,000 (1) 10,000 30,000
Retained earnings, 12/31
Carried forward 316,000 110,000 368,000
Statement of FP
Cash and receivables 81,000 65,000 (5) 10,000 136,000
Inventory 260,000 90,000 350,000
Land 80,000 80,000 160,000
Buildings and Equipment 500,000 150,000 (3) 50,000 700,000
Investment in Sally WP Co. 160,000 (2) 120,000
(3) 40,000 ____________
Total 1,081,000 385,000 1,346,000
Accumulated Depreciation 205,000 105,000 (4) 5,000 315,000
Accounts payable 60,000 20,000 (5) 10,000 70,000
Notes payable 200,000 50,000 250,000
Common stock:
Pilar Corporation 300,000 300,000
Sally WP Company 100,000 (2) 100,000
Retained earnings, 12/31
From above 316,000 110,000 368,000
NCI (1) 2,000 (2) 30,000 43,000
(3) 10,000
(6) 5,000
Total 1,081,000 385,000 230,000 230,000 1,346,000