Solution 4

P4-16
Balance Sheet Workpaper

Shutter Company and Pleasantdale Dairy
Consolidated Balance Sheet Workpaper
January 1, 20X7
Item
Cash and Receivables
192,000
Inventory
300,000
Land
128,000
Buildings and
Equipment (net)
610,000
Investment in
Pleasantdale Stock
Differential
Total Debits
1,230,000
Shutter
Company
Pleasantdale
Dairy
130,000
70,000
210,000
90,000
70,000
40,000
390,000
220,000
Adjustments and
Eliminations
Debit
Credit
(a)
900
(1) 18,000
420,000
Current Payables
80,000
111,100
Long-Term Liabilities
200,000
300,000
Common Stock
Shutter Company
400,000
400,000
Pleasantdale Dairy
Retained Earnings
390,000
390,900
Noncontrolling Interest
28,000
Total Credits
1,070,000
1,230,000
40,000
8,900
(2) 18,000
270,000
1,070,000
(3)
Consolidated
(3)
(1)270,000
(2) 18,000
8,900
100,000
60,000
220,000
(1) 60,000
(1)220,000
(a)
900
(1) 28,000
420,000
325,800
325,800
Adjusting and eliminating entries:

(a)
E(1)
E(2)

Retained Earnings
Accrue interest earned by Shutter Company.
Common Stock__Pleasantdale Dairy
Retained Earnings
Differential
Investment in Pleasantdale Dairy Stock
Eliminate investment balance.
Land
Differential
Assign differential.
900
900
60,000
220,000
18,000
270,000
28,000
18,000
18,000
E(3)
P4-21
a.
Current Payables
Eliminate intercompany receivable/payable.
8,900
8,900
Majority-Owned Subsidiary Purchased at Book Value
Eliminating entries:
E(1)
E(2)
Common Stock__Darla Corporation

Retained Earnings
Investment in Darla Corporation Stock
40,000
85,000
Accounts Payable
Accounts Receivable
12,500
b.
87,500
37,500
12,500
Cameron Corporation and Darla Corporation

December 31, 20X4
Cameron
Corp.
Darla
Corp.
Cash
Accounts Receivable
Inventory
Land
Buildings and Equipment
Investment in Darla
Corporation Stock
Total Debits
65,000
90,000
130,000
60,000
410,000
21,000
44,000
75,000
30,000
250,000
87,500
842,500
420,000
Accumulated Depreciation
Accounts Payable
Mortgage Payable
Common Stock
Cameron Corporation
Darla Corporation
Retained Earnings
Total Credits
150,000
152,500
250,000
80,000
35,000
180,000
(2) 12,500
40,000
85,000
(1) 40,000
(1) 85,000
Item
Eliminations
Debit
Credit
(2) 12,500
842,500
86,000
121,500
205,000
90,000
660,000
(1) 87,500
1,162,500
230,000
175,000
430,000
80,000
210,000
Consolidated
80,000
420,000
137,500
(1) 37,500
137,500
210,000
37,500
1,162,500
P4-21
(continued)
c.
Cameron Corporation and Subsidiary

Consolidated Balance Sheet
December 31, 20X4
Cash
Accounts Receivable
Inventory
Land
Less: Accumulated Depreciation
Total Assets
$ 86,000
121,500
205,000
90,000
$660,000
(230,000)
Accounts Payable
Mortgage Payable
Common Stock
Retained Earnings
Total Liabilities and
Stockholders' Equity
P4-23
a.
430,000
$932,500
$175,000
430,000
37,500
$ 80,000
210,000
290,000
$932,500
Consolidation of Majority-Owned Subsidiary with Differential
E(1)
E(2)
Common Stock__Forward Co.

Additional Paid-In Capital
Retained Earnings
Differential
Investment in Forward Co. Stock
140,000
60,000
150,000
134,500
397,000
87,500
Inventory
Land
Bonds Payable (Bond Discount)
Goodwill
Differential
45,000
22,500
37,500
7,500
22,000
134,500
b.
Quinn Company and Forward Company
January 1, 20X9
Item
Cash
216,000
Accounts Receivable
260,000
Inventory
445,000
Quinn
Company
Forward
Company
166,000
50,000
170,000
90,000
220,000
180,000
Adjustments and
Eliminations
Debit
Credit
(2) 45,000
Consolidated
Land
222,500
Buildings and
Equipment
1,137,500
Investment in
Forward Co. Stock
Differential
Goodwill
22,000
Total Debits
2,303,000
Accumulated Deprec.
440,000
Accounts Payable
160,000
Bonds Payable
682,500
Common Stock
Quinn Company
300,000
Forward Company
Add. Paid-In Capital
Quinn Company
230,000
Forward Company
Retained Earnings
403,000
87,500
Total Credits
2,303,000
120,000
80,000
(2) 22,500
700,000
400,000
(2) 37,500
397,000
(1)134,500
(2) 22,000
1,773,000
800,000
290,000
150,000
110,000
50,000
440,000
250,000
(2)
140,000
(1)140,000
60,000
150,000
(1) 60,000
(1)150,000
(1)397,000
(2)134,500
7,500
300,000
230,000
403,000
(1) 87,500
1,773,000
800,000
619,000
619,000
P4-23
(continued)
c.
Quinn Corporation and Subsidiary

January 1, 20X9
Cash
Accounts Receivable
Inventory
Land
Goodwill
Total Assets
$1,137,500
(440,000)
Accounts Payable
Bonds Payable
Common Stock
Additional Paid-In Capital
Retained Earnings
P4-24
a.
216,000
260,000
445,000
222,500
697,500
22,000
$1,863,000
$
$300,000
230,000
403,000
160,000
682,500
87,500
933,000
$1,863,000
Consolidation of Majority-Owned Subsidiary with Differential
E(1)
E(2)
Common Stock__Klunker Car Rentals

Retained Earnings
Differential
Investment in Klunker Car Rentals
200,000
100,000
45,000
285,000
60,000
Land
Goodwill
Differential
Notes Payable
b.
8,000
16,000
27,400
45,000
6,400
Skyhigh Airlines and Klunker Car Rentals

January 1, 20X2
Item

230,000
Inventory
90,000
Land
108,000
Skyhigh
Airlines
Klunker
Car
140,000
90,000
30,000
60,000
70,000
30,000
Eliminations
Debit
Credit
(2)
8,000
Consolidated

(net)
1,036,000
Marketable Securities
80,000
Investment in
Klunker Car Rentals
Differential
Goodwill
27,400
Total Debits
1,571,400
Accounts Payable
250,000
Taxes Payable
45,000
Notes Payable
106,400
Bonds Payable
600,000
Common Stock
Skyhigh Airlines
200,000
Klunker Car Rentals
Retained Earnings
310,000
60,000
Total Credits
1,571,400
790,000
230,000
(2) 16,000
80,000
285,000
(1) 45,000
(2) 27,400
1,315,000
490,000
190,000
60,000
15,000
30,000
100,000
(1)285,000
(2) 45,000
(2)
6,400
600,000
200,000
310,000
200,000
100,000
(1)200,000
(1)100,000
(1) 60,000
1,315,000
490,000
396,400
396,400
P4-24
c.
(continued)
Skyhigh Airlines and Subsidiary
January 1, 20X2

Inventory
Land
Buildings and Equipment (net)
Marketable Securities
Goodwill
Total Assets
Accounts Payable
Taxes Payable
Notes Payable
Bonds Payable
Common Stock
Retained Earnings
P4-26
a.
230,000
90,000
108,000
1,036,000
80,000
27,400
$1,571,400
$200,000
310,000
250,000
45,000
106,400
600,000
60,000
510,000
$1,571,400
Intercorporate Receivables and Payables
E(1)
Common Stock__Shield Company

Capital in Excess of Par
Differential
Retained Earnings
150,000
140,000
20,000
5,000
Investment in Shield Company Stock
191,000
114,000
E(2)
Goodwill
Differential
20,000
20,000
E(3)
Bonds Payable
Investment in Shield Company Bonds
50,000
50,000
Eliminate intercompany bonds.
E(4)
Accounts Payable
Accounts Receivable
10,000
10,000
P4-26
(continued)
b.
Astor Corporation and Shield Company

January 1, 20X7
Item
Cash
105,000
Accounts Receivable
145,000
Inventory
264,000
700,000
Investment in:
Shield Company Stock
Shield Company Bonds
Differential
Goodwill
20,000
Total Debits
1,234,000
Shield
Company
70,000
35,000
90,000
65,000
184,000
80,000
400,000
300,000
Eliminations
Debit
Credit
(4) 10,000
191,000
50,000
(1) 20,000
(2) 20,000
235,000
Accounts Payable
60,000
Bonds Payable
250,000
Common Stock
Astor Corporation
300,000
Shield Company
Capital in Excess of Par
Retained Earnings
275,000
114,000
Total Credits
1,234,000
c.
Astor
Corp.
985,000
480,000
160,000
75,000
50,000
20,000
(4) 10,000
200,000
100,000
(3) 50,000
(1)191,000
(3) 50,000
(2) 20,000
300,000
275,000
150,000 (1)150,000
140,000 (1)140,000
(5,000)
(1)
5,000
(1)114,000
985,000
480,000
390,000
390,000
Astor Corporation and Subsidiary

January 1, 20X7
Cash
Accounts Receivable
Inventory
Goodwill
Total Assets
$105,000
145,000
264,000
$700,000
(235,000)
465,000
20,000
$999,000
Consolidated
Accounts Payable
Bonds Payable
Common Stock
Retained Earnings
P4-19
$ 60,000
250,000
114,000
$300,000
275,000
575,000
$999,000
Assignment of Differential in Workpaper
a.
Teresa Corporation and Sally Enterprises

January 1, 20X4
Teresa
Corp.
Sally
Enterprises

Inventory
Land
Investment in
Sally Enterprises
Differential
Goodwill
Total Debits
40,000
95,000
80,000
400,000
20,000
40,000
90,000
230,000
905,000
380,000
30,000
1,035,000
Accounts Payable
Notes Payable
Common Stock
Teresa Corporation
Sally Enterprises
Retained Earnings
Total Credits
175,000
60,000
100,000
65,000
15,000
50,000
240,000
75,000
150,000
Item
b.
Eliminations
Debit
Credit
60,000
135,000
170,000
640,000
(2) 10,000
290,000
(1) 40,000
(2) 30,000
(1)290,000
(2) 40,000
300,000
270,000
905,000
Consolidated
300,000
100,000
150,000
380,000
(1)100,000
(1)150,000
330,000
330,000
270,000
1,035,000
Teresa Corporation and Subsidiary

January 1, 20X4
Inventory
Land
Goodwill
Total Assets
Accounts Payable
Notes Payable
Common Stock
$ 60,000
135,000
170,000
$640,000
(240,000)
400,000
30,000
$795,000
$ 75,000
150,000
$300,000
Retained Earnings
P4-22
a.
270,000
570,000
$795,000
Majority-Owned Subsidiary Purchased at Greater than Book Value
E(1)
Common Stock__Darla Corporation

Retained Earnings
Differential
Investment in Darla Corporation Stock
40,000
85,000
14,700
102,200
37,500
E(2)
Inventory
Differential
4,200
10,500
14,700
E(3)
Accounts Payable
Accounts Receivable
12,500
12,500
P4-22
(continued)
b.
Cameron Corporation and Darla Corporation

December 31, 20X4
Cameron
Corp.
Darla
Corp.
Cash
Accounts Receivable
Inventory
Land
Investment in Darla
Corporation Stock
Differential
Total Debits
50,300
90,000
130,000
60,000
410,000
21,000
44,000
75,000
30,000
250,000
842,500
420,000
Accounts Payable
Mortgage Payable
Common Stock
Cameron Corporation
Darla Corporation
Retained Earnings
Total Credits
150,000
152,500
250,000
80,000
35,000
180,000
(3) 12,500
40,000
85,000
(1) 40,000
(1) 85,000
Item
c.
Eliminations
Debit
Credit
Consolidated
71,300
121,500
209,200
90,000
670,500
(3) 12,500
(2)
4,200
(2) 10,500
102,200
(1) 14,700
(1)102,200
(2) 14,700
1,162,500
230,000
175,000
430,000
80,000
210,000
842,500
80,000
420,000
166,900
(1) 37,500
166,900
210,000
37,500
1,162,500
Cameron Corporation and Subsidiary

December 31, 20X4
Cash
Accounts Receivable
Inventory
Land
Total Assets
Accounts Payable
Mortgage Payable
Common Stock
Retained Earnings
$ 71,300
121,500
209,200
90,000
$670,500
(230,000)
440,500
$932,500
$175,000
430,000
37,500
$ 80,000
210,000
290,000
$932,500

Solution 4

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Solution 4

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P4-16

Balance Sheet Workpaper

Adjusting and eliminating entries:

Cash and Receivables

Majority-Owned Subsidiary Purchased at Book Value

Common Stock__Darla Corporation

Cameron Corporation and Darla Corporation

Cameron Corporation and Subsidiary

Consolidation of Majority-Owned Subsidiary with Differential

Common Stock__Forward Co.

Quinn Corporation and Subsidiary

Consolidation of Majority-Owned Subsidiary with Differential

Common Stock__Klunker Car Rentals

Skyhigh Airlines and Klunker Car Rentals

Cash and Receivables

Buildings and Equipment

Cash and Receivables

Intercorporate Receivables and Payables

Common Stock__Shield Company

Astor Corporation and Shield Company

Astor Corporation and Subsidiary

Assignment of Differential in Workpaper

Teresa Corporation and Sally Enterprises

Cash and Receivables

Teresa Corporation and Subsidiary

Majority-Owned Subsidiary Purchased at Greater than Book Value

Common Stock__Darla Corporation

Cameron Corporation and Darla Corporation

Cameron Corporation and Subsidiary

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