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Chapter_05_XLSol

# Chapter_05_XLSol - Student Name Instructor Class...

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Student Name: Instructor Class: McGraw-Hill/Irwin Problem 05-32 a. How was the balance in the Equity Earnings of Sander account determined? 2011 income reported by Sander \$230,000 Excess patent rair value amortization (70,000) Deferred gross profit for 12/31/11 intercompany inventory (40,000) Recognized gross profit for 1/11/11 intercompany inventory 35,000 Sander's income adjusted \$155,000 To controlling interest \$124,000 To noncontrolling interest \$31,000 Correct! PLYMOUTH COMPANY AND SUBSIDIARY Consolidation Worksheet December 31, 2011 Adjustments and Non- Eliminations controlling Consolidated Accounts Plymouth Sander Debit Credit Interest Totals Revenues \$(1,740,000) \$(950,000) 300,000 \$(2,390,000) Correct! Cost of goods sold 820,000 500,000 40,000 300,000 1,025,000 Correct! 35,000 Depreciation expense 104,000 85,000 189,000 Correct! Amortization expense 220,000 120,000 70,000 410,000 Correct! Interest expense 20,000 15,000 35,000 Correct! Equity earnings - Sander (124,000) - 124,000 - Correct! Separate company income \$(700,000) \$(230,000) Combined company income (731,000) Correct! Consolidated income to noncontrolling interest (31,000) 31,000 Correct! Consolidated income to controlling interest \$(700,000) Correct! Retained earnings, 1/1 \$(2,800,000) \$(345,000) 310,000 \$(2,800,000) Correct! 35,000 Net Income (700,000) (230,000) (700,000) Correct! Dividends paid 200,000 25,000 20,000 5,000 200,000 Correct! Retained earnings, 12/31 \$(3,300,000) \$(550,000) \$(3,300,000) Correct! Cash \$535,000 \$115,000 \$650,000 Correct! Accounts receivable \$575,000 \$215,000 790,000 Correct! Inventory 990,000 800,000 40,000 1,750,000 Correct! Investment in Sander 1,420,000 20,000 968,000 - Correct! 348,000 124,000 Buildings and equipment 1,025,000 863,000 1,888,000 Correct! Patents 950,000 107,000 210,000 70,000 1,197,000 Correct! Goodwill 225,000 225,000 Correct! Total assets \$5,495,000 \$2,100,000 \$6,500,000 Correct! Accounts payable (450,000) (200,000) (650,000) Correct! Notes payable (545,000) (450,000) (995,000) Correct! Noncontrolling interest in Sander 1/1 242,000 87,000 (329,000) (355,000) Correct! Noncontrolling interest in Sander 12/31 Common stock (900,000) (800,000) 800,000 (900,000) Correct! Additional paid-in capital (300,000) (100,000) 100,000 (300,000) Correct! Retained earnings 12/31 (3,300,000) (550,000) (3,300,000) Correct! Total liabilities and equity \$(5,495,000) \$(2,100,000) 2,234,000 2,234,000 \$6,500,000 Correct!

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Student Name: Instructor Class: McGraw-Hill/Irwin Problem 05-32 Parentheses indicate a credit balance.
Given Data P05-32: Sander Company outstanding stock purchased 80% by Plymouth Corp on 1/1/09 Cash paid for Sander stock \$1,200,000 Sander's book value at time of purchase \$925,000 Undervaluation of Sander's patent account at time of purchase \$350,000 Remaining life of patents (years) 5 Intercompany inventory sales for past three years: Gross Profit Intercompany

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