NAMA : M.

TOLHA RAMADHANI
NIM : 041811333003
TUGAS : AKL 1 WEEK 6

Solution P5-1

Proctor Corporation and Subsidiary

Consolidated Statement of Income and Retained Earnings
for the year ended December 31, 2008

Sales ($1,300,000 + $650,000 - $80,000 intercompany sales) $1,870,000

Less: Cost of sales ($800,000 + $390,000 - $80,000 inter-

company purchases - $12,000 unrealized profit in beginning
inventory + $16,000 unrealized profit in ending inventory) (1,114,000)

Gross profit 756,000

Other expenses ($340,000 + $160,000) (500,000

Income before noncontrolling interest 256,000

Noncontrolling interest expense($100,000+$12,000 - $16,000)  10% (9,600)

Consolidated net income 246,400

Add: Beginning consolidated retained earnings 369,200

Less: Dividends for 2008 (100,000)

Consolidated retained earnings December 31, 2008 $ 515,600

Solution P5-4

1 Plier's income from Stuff 2007 2008 2009

75% of Stuff's net income $ 300,000 $ 337,500 $ 262,500

Unrealized profit in December 31,

2007 inventory (downstream)
($200,000  1/2)  100% (100,000) 100,000
 Unrealized profit in December 31,
2008 inventory (upstream)
$100,000  75% (75,000) 75,000

Plier's income from Stuff $ 200,000 $ 362,500 $ 337,500

2 Plier's net income

Plier's separate income $1,800,000 $1,700,000 $2,000,000

Add: Income from Stuff 200,000 362,500 337,500

Plier's net income $2,000,000 $2,062,500 $2,337,500

3 Consolidated net income

Separate incomes of Plier and

Stuff combined $2,200,000 $2,150,000 $2,350,000

Unrealized profit in December 31,

2007 inventory (100,000) 100,000

Unrealized profit in December 31,

2008 inventory (100,000) 100,000

Total income 2,100,000 2,150,000 2,450,000

Less: Noncontrolling interest expense

2007 $400,000  25% (100,000)
2008 ($450,000 - $100,000)
 25% (87,500)
2009 ($350,000 + $100,000)
 25% (112,500)

Consolidated net income $2,000,000 $2,062,500 $2,337,500