Nama : Febbinia Dwigna Pitaloka

NIM : 041811333217
Kelas : AKL I (O)
Akuntansi Keuangan Lanjutan 1 Week 6
Soal Teori
Answers to Questions
1. The objective of eliminating the effects of intercompany sales of plant assets is to reflect
plant assets and related depreciation amounts in the consolidated financial statements at
cost to the consolidated entity.
2. Consolidation procedures for eliminating unrealized profit on plant assets are affected by
the direction of the sale. The full amount of unrealized profit or loss on downstream sales
(parent to subsidiary) is charged or credited to the controlling interest. In the case of
upstream sales, however, unrealized profit or loss is allocated between controlling and
noncontrolling interests. Because there is no allocation to noncontrolling interests in the
case of a 100 percent owned subsidiary, consolidation procedures are the same for
upstream sales as for downstream sales.
3. Unrealized gains and losses from intercompany sales of land are realized from the
viewpoint of the selling affiliate when the purchasing affiliate resells the land to parties
outside the consolidated entity. This is also the point at which the consolidated entity
recognizes gain or loss on the difference between the selling price to outside parties and
the cost to the consolidated entity.
Soal Exercise
E6-4
   
1. Entries for 2011

Cash 45,000
        Investment in 45,000
Sal
        To record dividends received from Sal.

Investment in Sal 54,000

        Income from Sal 54,000

To record income from Sal computed as follows:

Share of Sal’s reported income ($75,000  90%) $   67,500
Less: Gain on building sold to Sal   (15,000)
Add: Piecemeal recognition of gain on building
  ($15,000/10 years) 1,500
Income from Sal $   54,000

2 Pig Corporation and Subsidiary

Consolidated Income Statement

for the year ended December 31, 2011

Sales $1,100,000
Cost of sales (700,000)
    Gross profit 400,000
Operating expenses   (223,500)
    Total consolidated income 176,500
Noncontrollinginterest share (7,500)
    Controlling interest share $  169,000
Soal Problem
P6-4

Preliminary computations

Cost January 1, 2011 $2,700,000

Add: Income from Sto for 2011
    Equity in income ($400,000  90%) $360,000
    Less: Patent amortize. ($600,000/10 years)x 90% (54,000)
    Less: Unrealized inventory profit (100,000)
    Less: Unrealized profit on machinery
      (selling price $350,000 - book value $280,000) (70,000)
    Add: Piecemeal recognition of profit on
      machinery ($70,000/3.5 years  .5 year)   10,000
Income from Sto for 2011 146,000
Less: Dividends $100,000  90% (90,000)
Investment balance January 1, 2012 2,756,000
Add: Income from Sto for 2012
    Equity in income ($500,000  90%) $450,000
    Less: Patent amortization (90%) (54,000)
    Add: Unrealized profit in beginning inventory 100,000
    Less: Unrealized profit in ending inventory (120,000)
    Add: Piecemeal recognition of profit on
      machinery ($70,000/3.5 years)   20,000
    Less: Gain on sale of land (50,000)
Income from Sto for 2012 346,000
Less: Dividends ($200,000  90%) (180,000)
Investment balance December 31, 2012 $2,922,000
Noncontrolling interest share of Sto’s income 2011 2012
(10%)
Sto’s reported net income $400,000 $500,000
    Less: Patent amortization (60,000) (60,000)
Sto’s adjusted income $340,000 $440,000
10% Noncontrollling interest share $ 34,000 $ 44,000

Pal Corporation and Subsidiary

Consolidation WorkPapers
for the Year Ended December 31, 2012
 (in thousands)

Adjustments and Consolidated

Pal Sto 90%  Eliminations Statements
Income Statement
Sales $  4,500 $ 1,900 a  720 $  5,680
Income from Sto 346 f 346
Gain on land 50 e  50
Cost of sales   (2,000) (1,000) c  120 a  720
b  100   (2,300)
Operating expense   (1,130) (400) h  60 d   20 (1,570)
Consolidated NI   1,810
Noncontrollingshare k  44 (44)
Controlling share of NI $  1,766 $  500 $  1,766
Retained Earnings
Retained earnings — Pal $  2,000 $  2,000
Retained earnings — Sto $ 1,200 g 1,200
Controlling share of NI   1,766 500   1,766
Dividends   (1,500) (200) f  180
k   20   (1,500)
Retained earnings
  December 31 $  2,266 $ 1,500 $  2,266
Balance Sheet
Cash $  1,364 $  140 $  1,504
Accounts receivable   1,800   1,000 i 100   2,700
Dividends receivable  180 j  180
Inventories 600 360 c  120 840
Land   1,000 300 e   50   1,250
Buildings — net   2,800 800   3,600
Machinery — net   3,300   1,400 d   40   4,660
Investment in Sto   2,922 _______ b  100 f  166
d   60 g
2,916
Patents g  540 h  60 480
Total assets $13,966 $ 4,000 $15,034
Accounts payable $  2,000 $  500 i 100 $  2,400
Dividends payable 300 200 j  180 320
Other liabilities   1,400 300   1,700
Capital stock   8,000   1,500 g 1,500   8,000
Retained earnings   2,266   1,500   2,266
Total equities $13,966 $ 4,000
Noncontrolling interest January 1 g  324
Noncontrolling interest December 31 _______ k 24 348
5,020 5,020 $15,034