Pony Corporation and Subsidiary

Working Paper for Consolidated Financial Statements

For the Year Ended December 31, 2020
Pony Short Elimination
Debit
Statement of Comprehensive Income
Sales 200,000 120,000
Dividend Income 10,000 - 1) 10,000
Total 210,000 120,000
Less: Other Expense 105,000 75,000
Depreciation Expense 25,000 15,000
Comprehensive Income, carried forward 80,000 30,000

Statement of Retained Earnings

Retained Earnings, beg.
Pony 230,000
Short 50,000 2) 50,000
Comprehensive Income
Pony 80,000
Short 30,000
Less: Dividends Declared
Pony 40,000
Short 10,000
Retained Earnings, end, carried forward 270,000 70,000

Statement of Financial Position

Assets
Cash and Receivables 15,000 5,000
Accounts Receivables 30,000 40,000
Inventory 70,000 60,000
Depreciable Assets 325,000 225,000
Investment in Short Co. 180,000 -

Goodwill - - 3) 30,000
Total Assets 620,000 330,000
Liabilities and Shareholders' Equity
Liabilities
Accounts Payable 50,000 40,000
Notes Payable 100,000 120,000
Total Liabilities 150,000 160,000
Shareholders' Equity
Common Stock
Pony 200,000
Short 100,000 2) 100,000
Retained Earnings
 Pony 270,000
Short 70,000
Total Shareholders' Equity 470,000 170,000
Total Liabilities and Shareholders' Equity 620,000 330,000 190,000

E1 Dividend Income 10,000

Dividends Declared - Short Co. 10,000
To eliminate the intercompany dividends

E2 Common Stock - Short Co. 100,000

Retained Earnings - Short Co. 50,000
Investment in Short Co. 150,000
To eliminate the subdiary's equity accounts against the investment account

E3 Goodwill 30,000
Investment in Short Co. 30,000
To eliminate the excess of book value against the investment account and
recognize the goodwill
ments

Elimination Consolidated
Credit

320,000
-
320,000
180,000
40,000
100,000

230,000

100,000

40,000
1) 10,000
290,000

20,000
70,000
130,000
550,000
2) 150,000 -
3) 30,000
30,000
800,000

90,000
220,000
310,000

200,000
 290,000

490,000
190,000 800,000
 Pilar Corporation and Subsidiary
Working Paper for Consolidated Financial Statements
For the Year Ended December 31, 2020
Pilar Sally Elimination
Debit
Statement of Comprehensive Income
Sales 200,000 100,000
Dividend Income 8,000 - 1) 8,000
Total 208,000 100,000
Less: Cost of Goods Sold 120,000 50,000
Inventory Losses 15,000 5,000
Depreciation Expense 25,000 15,000 4) 5,000
Comprehensive Income 48,000 30,000
Less: NCI in CI of Sally 6) 5,000
Comprehensive Income, carried forward 48,000 30,000

Statement of Retained Earnings

Retained Earnings, beg.
Pilar 298,000
Sally 90,000 2) 50,000
4) 5,000
7) 7,000
Comprehensive Income
Pilar 48,000
Sally 30,000
Dividends Declared
Pilar 30,000
Sally 10,000
Retained Earnings, end 316,000 110,000

Statement of Financial Position

Assets
Cash and Receivables 81,000 65,000
Inventory 260,000 90,000
Land 80,000 80,000
Buildings and Equipment 500,000 150,000 3) 50,000
Less: Accumulated Depreciation 205,000 105,000
Investment in Sally Co. 160,000 -

Total Assets 876,000 280,000

Liabilities and Shareholders' Equity
Liabilities
Accounts Payable 60,000 20,000 5) 10,000
Notes Payable 200,000 50,000
Total Liabilities 260,000 70,000
 Shareholders' Equity
Common Stock
Pilar 300,000
Sally 100,000 2) 100,000
Retained Earnings
Pilar 316,000
Sally 110,000
Non-Controlling Interest 1) 2,000

Total Shareholders' Equity 616,000 210,000

Total Liabilities and Shareholders' Equity 876,000 280,000 242,000

Jan. Investment in Sally Co. 160,000

Cash 160,000
To record the investment related to acquisition of Sally's shares

Dec.Cash 8,000
Dividend Income 8,000
To record the dividend received from Sally Co.

E1 Dividend Income 8,000

Non-controlling Interest 2,000
Dividends Declared - Sally Co. 10,000
To eliminate the intercompany dividends

E2 Common Stock - Sally Co. 100,000

Retained Earnings - Sally Co. 50,000
Investment in Sally Co. 120,000
Non-controlling Interest 30,000
To eliminate the equity accounts of Sally against the
investment account and recognize the NCI

E3 Building and Equipment 50,000

Investment in Sally Co. 40,000
Non-controlling Interest 10,000
To eliminate the excess of book value by adjusting the asset
of Sally

E4 Retained Earnings, beg - Sally Co. 5,000

Depreciation Expense 5,000
Accumulated Depreciation 10,000
 To record the year-end depreciation of revalued building and
equipment

E5 Accounts Payable 10,000

Cash and Receivables 10,000
To eliminate the intercompany receivables and payables

E6 Non-controlling Interest in CI of Sally Co. 5,000

Non-controlling Interest 5,000
To record the share of Sally Co. in the operation's income

E7 Retained Earnings, beg - Sally Co. 7,000

Non-controlling Interest 7,000
To recognize the NCI in Sally's prior earnings
ments

Elimination Consolidated
Credit

300,000
-
300,000
170,000
20,000
45,000
65,000
5,000
60,000

326,000

60,000

30,000
1) 10,000
356,000

5) 10,000 136,000
350,000
160,000
700,000
4) 10,000 320,000
2) 120,000 -
3) 40,000
1,026,000

70,000
250,000
320,000
 300,000

356,000

2) 30,000 50,000
3) 10,000
6) 5,000
7) 7,000
706,000
242,000 1,026,000