Nama : Meliana Fitri Faradilaa

NIM : 023001801111

Mata Kuliah : Akuntansi Keuangan Lanjutan I

Dosen Pengampu : Por.Dr. Etty Murwaningsih.,Ak.,M.M

Tugas Dosen Chapter 5

E5-3 Elimination Entries with Differential

On June 10, 20X8, Game Corporation acquired 60 percent-of Amber Company’s common stock. The fair
value of the noncontrolling interest was $32,800 on that date. Summarized balance sheet data for the
two companies immediately after the stock purchase are as follows:

Required

a. Give the elimination entries required to prepare a consolidated balance sheet immediately after
the purchase of Amber Company shares.
b. Explain how elimination entries differ from other types of journal entries recorded in the normal
couse of business.

Jawab:

a. Equity Method Entries on Game Corporation’s Books

Investment Amber Corporation $ 49,200

Cash $ 49,200
Record the initial investment in Amber Corporation.

Book Value Calculations

NCI 40% + Game Corp. 60% = Common Stock + Retained Earnings

Ending Book Value 22,800 34,200 = 20,000 + 37,000

6/10/20X8

Goodwill = 0
Identifiable Excess
= 15,000
60%
 Book value = 34,200
 $ 49,200 Initial Investment in Amber Corporation.

Basic elimination entry

Common Stock 20,000

Retained Earnings 37,000
Investment in Amber Corp 34,200
NCI in NA of Amber Corp 22,800

Excess Value ( Differential ) calculations :

NCI 40 % + Game Corp. 60 % = Inventory + Buildings & Equipment

Beginning Balanace 10,000 15,000 5,000 20,000

Excees Value ( Differential ) reclassification entry :

Inventory 5,000
Buildings & Equipment 20,000
Investment in Amber Corporation 15,000
NCI in NA of Amber Corporation 10,000

Investment in Amber Corporation

Acquisition price 49,200
  34,200 Basic
  15,000 Excess Relassification
0

b. entri jurnal yang digunakan untuk mencatat transaksi, menyesuaikan saldo akun, dan menutup
akun pendapatan dan pendapatan pada akhir periode dicatat dalam pembukuan perusahaan
dan mengubah saldo yang dilaporkan. Di sisi lain, ayat jurnal penghapusan hanya dimasukkan ke
dalam lembar kerja konsolidasi, untuk memudahkan penyusunan laporan keuangan
konsolidasian. Akibatnya, mereka tidak mengubah saldo yang tercatat di rekening perusahaan
dan harus dimasukkan kembali setiap kali lembar kerja konsoliasi disiapkan.
E5-6 Majornity -Owned Subsidiary Acquired at Higher than Book Value

Zenth Corporation acquired 70 percent of Down Corporation’s common stock on December

31, 20X4, for $ 102,200. The fair value of the noncontrolling interest at that date was determined to
be $ 43,800. Data from the balance sheet of the two companies included the following amounts as
of the date of acquisition:

Zenith
Item Corporation Down Corporation
Cash $50,300 $21,000
Accounts Receivable 90,000 44,000
Inventory 130,000 75,000
Land 60,000 30,000
Buildings & Equipment 410,000 250,000
Less: Accumulated Depreciation -150,000 -80,000
Investment in Down Corporation
Stock 102,200

Total Assets $692,500 $340,000

Accounts Payable $152,500 $35,000

Mortgage Payable 250,000 180,000
Common Stock 80,000 40,000
Retained Earnings 210,000 85,000
Total Liabilities & Stockholders'
Equity $692,000 $340,000

At the date of the business combination, the book values of Down’s assets and liability approximated
fair value except for inventory, which had a fair value of $ 81,000 and buildings and equipment, which
had a faie value of $ 185,000. At December 31, 20X4. Zeinth reported accounts payable of $ 12,500 to
Down, which reported an equal amount in its accounts receivables.

Required

a. Give the elimination entry or entries needed to prepare a consolidated balance sheet
immediately following the business combination.
b. Prepare a consolidated balance sheet worksheet.
c. Prepare a consolidated balance sheet in good form.

Jawab :

a. Equity Method Entries on Zenith Corporation’s Books:

Investment in Down Corporation $ 102,200

Cash $ 102,200
Record the initial Investment in Down Coroporation
Book Value Calculations :

NCI 30% + Zenith Corp 70% = Common Stock + Retained Earnings

Ending book value 37,500 + 87,500 = 40,000 + 85,000

12/31/20X4

Goodwill = 0
Identifiable
Excess = 14,700
70%
Book value =
87,500
 $ 102,200 ( Initial investment in Down Corporation )

Basic elimination entry

Common Stock 40,000

Retained Earnings 85,000
Investment in Down Corporation 87,500
NCI in NA od Down Corporation 37,500

Excess Value ( Differential ) Calculations :

NCI 30% + Zenith Copr. 70% = Inventory + Buildings & Equipment

Beginning blances 6,300 + 14,700 = 6,000 + 15,000

Excess value ( Differential ) reclassification enrtry :

Inventory 6,000
Buildings & Equipment 15,000
Invesment in Down Corporation 14,700
NCI in NA of Down Corporation 6,300

Elimination Intercompany accounts :

Accounts Payable 12,500

Accounts Receivable 12,500
 Optional Accumulated Depreciation Eimination entry

Accumulated Depreciation 80,000

Buildings & Equipment 80,000

Investment in Down Corporation

Acquisition price 102,200
  87,500 Basic
  14,700 Excess Relassification
0

b. Zenith Down Elimination Entries

Condolidated
  Corp Corp DR CR
Balance Sheet
Cash 50,300 21,000 71,300
Accounts Receivable 90,000 44,000 12,500 121,500
Inventory 130,000 75,000 6,000 211,000
Land 60,000 30,000 90,000
Buildings & Equipment 410,000 250,000 15,000 80,000 595,000
Less: Accumulated Depreciation -150,000 -80,000 80,000 -150,000
Investment in Down
Corpporation 102,200 87,500 0
14,700
Total Asset 692,500 340,000 101,000 180,000 938,800

Accounts Payable 152,500 35,000 12,500 175,000

Mortgage Payable 250,000 180,000 430,000
Common Stock 80,000 40,000 40,000 80,000
Retained Earnings 210,000 85,000 85,000 210,000
NCI in NA of Down Corporation 37,500 43,800
6,300
Total Liabilities & Equity 692,500 340,000 137,500 37,500 938,800
 c.

Zenith Corporation and Subsidiary

Consolidated Balance Sheet
December 31, 20X4
Cash $71,300
Accounts Receivable 121,500
Inventory 211,000
Land 90,000
$595,00
Buildings and Equipment 0
Less: Accumulated Depreciation -150,000 445,000
$938,00
Total Assets 0

$175,00
Accounts Payable 0
Mortgage Payable 430,000
Stockholder's Equity:
Controlling Interest:
Common Stock 80,000
Retained Earnings 210,000
Total Controlling Interest 290,000
Noncontrolling Interest 43,800
Total Stockholder's Equity 333,800
$938,00
Total Liabilities and Stockholder's Equity 0

E5-11 Consolidated after One Years of Owneship

Pioneer Corporation purchased 80 percent of Lowe Corporation’s stock on January 1, 20X2. At that date,
Lowe reported retained earnings of $80,000 and had $120,000 of stock outstanding. The fair value of its
buildings was $32,000 more than the book value.

Pioneer paid $190,000 to acquire the Lowe share. At the date, the noncontrolling interest had a
fair value of $47,500. The remaining economic life for all Lowe’s depreeciabel assets was eight years on
the date of combination. The amount of the differential assigned to goodwill ist not impaired. Lowe
reported net income of $40,000 in 20X2 and declared no dividends.

Required
 a. Give the elimination entries needed to prepare a consolidated balance sheet immediately after
Pioneer purchased Lowe stock.
b. Give all elimination entries needed to prepare a full set of consolidated finanacial statements for
20X2.

Jawab :

a. Equity Method Entries on Pioneer Corporation’s Books:

Investment in Lowe Corporation 190,000

Cash 190,000
Record the initial Investment in Lowe Corporation

Book Value Calculations:

NCI 20% + Pioneer Corp. 80% = Common Stock + Retained Earnings

Ending Book Value 40,000 + 160,000 = 120,000 + 80,000

1/1/20X2

Goodwill = 4,400
Identifiable Excess
= 25,600
80%
Book Value =
160,000
 $ 190,000 ( Initial investment in Lowe Corporation )

Basic elimination entry

Common Stock 120,000

Retained Earnings 80,000
Investment in Lowe Corporation 160,000
NCI in NA of Lowe Corporation 40,000

Excess Value ( Differential ) calculations :

NCI 20% + Pioneer Corp. 80% = Buildings + Goodwill

Beginning Balances 7,500 + 30,000 = 32,000 + 5,500

Excess Value ( Differential ) Reclassification entry :

 Buildings 32,000
Goodwill 5,500
Investment in Lowe Corporation 30,000
NCI in NA of Lowe Corporation 7,500

Investment in Down Corporation

Acquisition price 190,000
  160,000 Basic
  30,000 Excess Relassification
0

b. Equity Method Entries on Pioneer Corporation’s Book “

Investment in Lowe Corporation 190,000

Cash 190,000
Record the Initial Investment in Lowe Corporation

Investment in Lowe Corporation 32,000

Income from Lowe Corporation 32,000
Record Pioneer Corporation 80% shares of Lowe Corporation’s 20X2 income

Income from Lowe Corporation 3,200

Investment in Lowe Corporation 3,200
Record amortization of excess acquisition price

Book Value Calculations :

NCI 20% + Pioneer Corp. 80% = Common Stock + Retained Earnings

Original book value 40,000 + 160,000 = 120,000 + 80,000
+ Net Income 8,000 + 32,000 = 40,000
0 0 0
Ending Book Value 48,000 192,000 120,000 120,000

1/1/20X2

Goodwill = 4,400
Identifiable
Excess = 25,600
80%
 Book Value =
160,000
 $ 190,000 ( Initial Investment in Lowe Corporation )

12/31/20X2

Goodwill= 4,400
Excess = 22,400
80%
Book Value=
192,000
 $ 218,800 ( Net investment in Lowe Corporation

Basic elimination entry

Common Stock 120,000

Retained Earnings 80,000
Income from Lowe Corporation 32,000
NCI in NI of Lowe Corporation 8,000
Investment in Lowe Corporation 192,000
NCI in NA of Lowe Corporation 48,000

Excees Value ( Differential ) Calculations :

NCI 20% + Pioneer Corp 80% = Buildings + Accm. Depreciation + Goodwill

Beginning Balance 7,500 + 30,000 = 32,000 + 0 + 5,500
Changes (800) (3,200) (4,000) 0
Ending Balance 6,700 26,800 32,000 (4,000) 5,500

Amortized Excess value reclassification entry:

Depreciation Expense 4,000

Income from Lowe Corporation 3,200
NCI in NI Lowe Corporation 800
 Excess Value ( Differential ) Reclassification entry :

Buildings 32,000
Goodwill 5,500
Accumulated Depreciation 4,000
Investment in Lowe Corporation 26,800
NCI in NA of Lowe Corporation 6,700

Investment in Lowe Corporation

Acquisition Price 190,000  
80% Net Income 32,000  
  3,200 Excess Value
Ending Balance 218,000  
192,000 Basic
26,800 Excess
  Reclassification
0  

Income from Lowe Corporation

 
32,000 80% Net Income
Amortization 3 ,200  
28,800 Ending Balance
32,000  
  3,200
0

E5-13 Consolidated Worksheet of Majority – Owned Subsidiary

Proud Corporation acquired 80 percent of Stergis Company’s voting stock on January 1,20X3, at
underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book
value of Stergis at that date. Proud uses the equity method in accounting for its ownership of Stergis
during 20X3, On December, 31, 20X3, the trial balances of the two companies are as follows:

Proud Corporation Stergis Company

Item
Debit Credit Debit Credit
Currents Assets $173,000 $105,000
Depreciable Assets 500,000 300,000
Investment in Stergis Company
stock 136,000
Depreciation Expense 25,000 15,000
Other Expenses 105,000 75,000
Dividend Declared 40,000 10,000
Accumulated Depreciation $175,000 $75,000
Current Liabilities 50,000 40,000
Long-Term Debt 100,000 120,000
Common Stock 200,000 100,000
Retained Earnings 230,000 50,000
Sales 200,000 120,000
Income from Subsidiary 24,000

TOTAL $979,000 $979,000 $505,000 $505,000

Required

a. Give all elimination entries required as of December 31, 20X3, to prepare consolidated financial
statements
b. Prepare a three-part consolidated worksheet
c. Prepare a consolidated balance sheet, income statement, and retained earnings statement for
20X3.

Jawab :

a. Equity Method Entries on Proud Corporation’s Book’s

Investment in Stergis Corporation 120,000

Cash 120,000
Record the Initial Investment in Stergis Corporation

Investment in Stergis Corporation 24,000

Income from Stergis Corporation 24,000
Record Proud Corporation’s 80% share of Stergis Co’s 20X3 income

Cash 8,000
Investment in Stergis Corporation 8,000
Record Proud Corporation’s 80% share of Stergis Co’s 20X3 dividend

Book Value Calculations :

NCI 20% + Proud Corp. 80% = Common Stock + Retained Earnings

Original Book Value 30,000 + 120,000 100,000 50,000
 + Net Income 6,000 + 24,000 30,000
-Dividends (2,000) + (8,000) (10,000)
Ending Book Value 34,000 136,000 100,000 70,000

1/1/20X3

Goodwill = 0
Identifiable Excess = 0
80%
Book Value =
120,000
 $120,000 ( Initial Investment in Stergis Corporation

12/31/20X3

Goodwill = 0
Excess = 0
80%
Book Value =
136,000
 $136,000 ( Net Investment Stergis Corporation )

Basic Elimination entry

Common Stock 100,000

Retained Earnings 50,000
Incomefrom Stergis Corporation 24,000
NCI in NI of Stergis Corporation 6,000
Dividends Declared 10,000
Investment in Stergis Corporation 136,000
NCI in NA of Stergis Corporation 34,000

Investment in Income from

Stergis Corporation Stergis Corporation
Acquisition Price 120,000    
80% Net Income 24,000   24,000 80% Net Income
  8,000 80%Dividend    
Ending Balance 136,000   24,000 Ending Balance
  136,000 Basic 24,000  
0   0

Optional Accumulated Depreciation elimination entry

 Accumulated Depreciation 60,000
Depreciation Assets 60,000

Elimination
Proud Stergis
b. Entries Consolidate
Corporatio d
Corporation DR CR
  n
Income Statement
Sales 200,000 120,000 320,000
Less: Depreciation Expense -25,000 -15,000 -40,000
Less: Other Expense -105,000 -75,000 -180,000
Income for Stergis Corporation 24,000   24,000   0
Consolidated Net income 94,000 24,000 100,000
NCI in Net Income     6,000   -6,000
Controlling Interest in Net
Income 94,000 30,000 30,000 0 94,000

Statement of Retained Earnings

Beginning Balance 230,000 50,000 50,000 230,000
Net Income 94,000 30,000 30,000 0 94,000
Less: Dividend Declared -40,000 -10,000   10,000 -40,000
Ending Balance 284,000 70,000 80,000 10,000 284,000

Balance Sheet
Current Assets 173,000 105,000 278,000
Depreciable Assets 500,000 300,000 60,000 740,000
Less: Accumulated Depreciation -175,000 -75,000 60,000 -190,000
Investment in Stergis Corporation 136,000     136,000 0
Total Assets 634,000 330,000 60,000 60,000 828,000

Current Liabilities 50,000 40,000 90,000

Long-Term Debt 100,000 120,000 220,000
Common Stock 200,000 100,000 100,000 200,000
Retained Earnings 284,000 70,000 80,000 10,000 284,000
NCI in NA of Stergis Corporation       34,000 34,000
Total Liabilites & Equity 634,000 330,000 180,000 44,000 828,000

c. Prepare a consolidated balance sheet, income statement, and retained earnings statement for
20X3.

Proud Corporation and Subsidiary

Consolidated Balance Sheet
December 31,20X3
Current Assets $278,000
Depreciable Assets $740,000
Less: Accumulated Depreciation -190,000 550,000
Total Assets $828,000

Current Liabilities
Long-Term Debt $90,000
Stockholder's Equity : 220,000
Controlling Interest :
Common Stock 200,000
Retained Earnings 284,000
Total Controlling Interest $484,000
NonControlling Interest 34,000
Total Stockholder's Equity 518,000
Total Liabilities & Equity $828,000

Proud Corporation and Subsidiary

Consolidated Income Statement
Year Ended December, 31, 20X3

Sales $320,000
Depreciation $40,000
Other Expenses 180,000
Total Expenses -220,000
Consolidated Net Income $100,000
Income to Noncontrolling Interest -6,000
Income to Controlling Interest $94,000

Proud Corporation and Subsidiary

Consolidated Retained Earnings Statement
Year Ended December, 31, 20X3

Retained Earnings, January 1,20X3 $230,000

Income to Controlling Interest,20X3 94,000
$324,000
Dividends Declared, 20X3 -40,000
Retained Earnings, December 31, 20X3 $284,000