Cost

of 70% interest January 1 $490,000 a. Income from Sun $60,200

Implied fair value of Sun (490,000 / 70%) $700,000 Dividends $35,000
BV Sun -600,000 Investment in Sun $25,200

Excess fair value over BV $100,000 b. Capital stock $500,000

Retained earnings $100,000
Unamortized excess $100,000
Investment in Sun $490,000
Alokasi excess : Noncontrolling interest $210,000

Undervalued Inventory ( sold in 2016 ) $5,000

Undervalued Building ( manfaat 7 thn ) $14,000 c. Cost of sales $5,000
Undervalued Equipment ( manfaat 3 thn ) $21,000 Buildings — net $14,000
Goodwill $60,000 Equipment — net $21,000
Goodwill $60,000
Excess fair value over BV $100,000 Unamortized excess $100,000

d. Depreciation expense $2,000

Buildings — net $2,000
Income from Sun

Sun’s reported net income $100,000 e. Depreciation expense $7,000

Less : Inventories sold in 2016 ($5,000) Equipment — net $7,000
Depreciation building ($2,000)
( 14.000/7 )
Depreciation equipment ($7,000) f. Noncontrolling Interest Share $25,800
(21.000/3 ) Dividends $15,000
Noncontrolling Interest $10,800
Adjusted income from Sun $86,000
Pam’s 70% controlling share $60,200 g. Accounts payable $10,000
NCI share 30% $25,800 Accounts receivable $10,000

h. Dividends payable $14,000

Dividends receivable $14,000

Pam Corporation and Subsidiary

Consolidation Workpapers
for the year ended December 31, 2016

Pam Sun 70% Adjustments and Eliminations Consolidated Statements

Income Statement Sales 800.000 700.000 1.500.000

Income from Sun 60.200 (a) 60.200
Gain on equipment 10.000 10.000
Cost of sales 300.000* 400.000 * ( c ) 5.000 705.000 *
Depreciation expense 155.000 * 60.000* ( d ) 2.000 224.000*
( e ) 7.000

Other expenses 160.000* 140.000 * 300 .000*

Consolidated NI 281.000
Noncontrolling share ( f ) 25.800 25.800*
Controlling share of NI 255.200 100.000 255.200

Retained Earnings
Retained Earnings-Pam 300.000 300.000

Retained Earnings-Sun 100.000 ( b ) 100.000

Controlling share of NI 255.200 100.000 255.200
Dividends 200.000* 50.000* ( a ) 35.000
( f ) 15.000 200.000

Retained earnings – Dec 31 355.200 150.000 355.200

Balance Sheet
Cash 96.000 60.000 156.000
Accounts receivable 100.000 70.000 ( g ) 10.000 160.000
Dividends receivable 14.000 ( h ) 14.000
Inventories 150.000 100.000 250.000
Other current assets 70.000 30.000 100.000
Land 50.000 100.000 150.000
Buildings - net 140.000 160.000 ( c ) 14.000 ( d ) 2.000 312.000
Equipment - net 570.000 330.000 ( c ) 21.000 ( e ) 7.000 914.000
Investment in Sun 515.200 ( a )25.200
( b ) 490.000

Goodwill ( c ) 60.000 60.000

Unamortized excess ( b ) 100.000 ( c ) 100.000

Total Asset 1.705.200 850.000 2.102.000

Accounts payable 200.000 85.000 ( g ) 10.000 275.000

Dividends payable 100.000 20.000 ( h ) 14.000 106.000
Other liabilities 50.000 95.000 145.000
Capital stock ($10 par) 1.000.000 500.000 ( b ) 500.000 1.000.000
Retained earnings 355.200 150.000 355.200

Noncontrolling interest January 1 ( b ) 210.000

Noncontrolling interest December 31 ( f ) 10.800 220.800

Total Liabilities & equities 1.705.200 850.000 919.000 919.000 2.102.000