p4-3

pan saf 75 %

income statement $800 $200

sales $27,6
income from staf ($500) ($100)
cost of sale ($194) ($52)
other expense
consolidated net income
noncontrolling share
controlling share of NI $133,6 $48

retained earnings
retained earnings - pan $360
retained earnings - saf $68
controlling share of NI $133,6 $48
dividends ($100) ($32)

retained earnings december 31 $393,6 $84

balance sheet
cash $106 $30
account receivable $172 $40
dividends receivable from saf $12
inventories $190 $20
note receivable $10
land $130 $60
building - net $340 $160
equipment - net $260 $100
investment in saf $363,6
patents
$1.573,6 $420

account receivable $170 $20

note payable to saf $10
dividends payable $16
capital stock, $ 10 par $1,000 $300
retained eranings $393,6 $84
$1.573,6 $420
noncontrolling interst january 1
noncontrolling interst january 31
Supporting calculation

saf's value at acquisition

book value at december 31, 2011 $384
less : 2011 net income ($48)
add : 2011 dividends $32
book value on january 1,2011 $368
fair value of patents $112
saf's fair value on january, 2011 $480

purchase price ( fair value ) of pan's 75 % share $360

noncontrolling interest ( 25 % ) $120

Saf's adjusted income

saf's net income $48

less : amortization of patents ($11,2)
saf's adjusted income $36,8
pan's 75 % share $27,6
noncontrolling interest 25 % share $9,2
adjustments and elimination consolidation
Debit Credit statement
$1,000
$27,6 ($600)
($257,2)
$11,2 $142,8
($9,2)
$9,2

$133,6

$360
$68
($133,6)
$24
$8 ($100)

$393,6

$136
$212
$12
$210
$10
$190
$500
$360

$11,2 $100,8
$3,6 $1.708,8
$360
$11,2 $190
$10
$12 $4
$300 $1,000
$393,6

$120
$1,2 $121,2
$550 $550 $1.708.8