ADVANCE FINANCIAL ACCOUNTING TUTORIAL

HOMEWORK

PROBLEM 1
PT Paripurna, a holding company that owns 70% ownership in PT Sempurna. The acquisition
was carried out on April 1, 2019 with an investment of Rp 315 million. PT Sempurna’s equity as
of December 31, 2018 consisted of share capital of Rp 100 million and retained earnings of Rp
300 million. The fair value of NCI at the acquisition date was Rp 135 million. The difference in
the value of the identified investment is allocated to the unrecorded Patent of PT Sempurna.
The Patent is estimated to still be usable for 5 years.

On July 1, 2019, PT Sempurna purchased LQ45 shares worth Rp 40 million which it classified as
FVOCI. Net profit from the separate operations of PT Paripurna and PT Sempurna during 2019
was Ro 200 million and Rp 120 million, respectively. Likewise, dividends from PT Paripurna and
PT Sempurna during 2019 were Rp 120 million and Rp 50 million, respectively. Dividends were
announced and paid on December 22, 2019. The fair value of the investment in PT Sempurna’s
LQ45 shares was Rp 45 million as of December 31, 2019.

Required:
a. Determined the value of the patent at the date of acquisiton.
b. Determine the balance of the Income from Subsidiary and OCI from Subsidiary
accounts recorded by PT Paripurna at the end of 2019.
c. Determine the balance of the Investment in Subsidiary account in PT Paripurna’s books
as of December 31, 2019.
d. Make a journal for PT Paripurna related to its investment in PT Sempurna during 2019
using the equity method.

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PROBLEM 2
PT Pasir acquired a 75% ownership interest in PT Silika on January 1, 2018 for $96,000. At that
time, PT Silika’s equity consisted of common stock of $60,000 and retained earnings of $40,000.
NCI’s fair value was $32,000 at the acquisition date. The book value of PT Silika’s net assets at
the acquisition date is the same as their fair value, except for buildings and equipment, which
has a fair value of $20,000 higher than its book value. Buildings and equipment can still be
used for 10 years.

PT Pasir’s retained earnings at the acquisition date were $102,000, with 2018 separated income
of $42,500. In that year, PT Pasir distributed dividends to shareholders with a value of $30,000.
In the same year, PT Silika reported profit of $24,000 and distributed dividend of $16,000. PT
Pasir uses the equity method to account for its investment in PT Silika.

Required:
a. Provide the elimination entries needed to prepare the Consolidated Financial
Statements as of December 31, 2018.
b. Complete the Consolidated Working Paper provided (attached).

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 Kertas Kerja Konsolidasi
Neraca Saldo Per 31 Desember 2018 (dalam 000)

Elimination Entries
P S Consolidated
dr. cr.
INCOME STATEMENT
Sales 260.000 180.000
Income from Subsidiary 16.500
COGS 125.000 110.000
Wages Expenses 42.000 27.000
Depreciation Expense 25.000 10.000
Interest Expense 12.000 4.000
Other Expenses 13.500 5.000
Consolidated NI 59.000 24.000
NCI in NI
Controlling Interest in NI 59.000 24.000

RETAINED EARNINGS STATEMENT

Retained Earnings, 1 January 102.000 40.000
Add: Net Income 59.000 24.000
Less: Dividends 30.000 16.000
Retained Earnings, 31 December 131.000 48.000

BALANCE SHEET
Cash 47.500 21.000
Account Receivable 70.000 12.000
Inventory 90.000 25.000
Land 30.000 15.000
Building & Equipment (net) 205.000 110.000
Less: Accumulated Depreciation
Investment in S 100.500
Goodwill
Total Assets 543.000 183.000

Account Payable 45.000 16.000

Wages Payable 17.000 9.000
Notes Payable 150.000 50.000
Common Stock 200.000 60.000
Retained earnings, 31 December 131.000 48.000
NCI in NA
Total Liabilities & Equity 543.000 183.000

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