Tugas21
Financial statements for Pill Corporation and Sank Corporation for 20X6 are summarized
as follows :
Pill
Sank
$210,000
$130,000
Combined Income and Retained Earnings Statements
for the Year Ended December 31, 20X6
Sales
Income from Sank
Gain on sale of land
Depreciation expense
31,900
-
10,000
(40,000)
(30,000)
(110,000)
(60,000)
91,900
50,000
Add : Beginning retained earnings
140,400
50,000
Deduct : Dividends
(30,000)
Other expenses
Net income
Retained earnings December 31, 20X6
-
$202,300
$100,000
$200,000
$170,000
550,000
350,000
(120,000)
(70,000)
Balance Sheet at December 31, 20X6
Current assets
Plant assets
Accumulated depreciation
Investment in Sank
322,300
-
Total assets
$952,300
$450,000
$150,000
$ 50,000
Capital stock
600,000
300,000
Retained earnings
202,300
100,000
$952,300
$450,000
Current liabilities
Total equities
Additional Information
1. Pill a acquired an 80% interest in Sank on January 2, 20X4 for $290,000,
when Sank’s stockholder’s equity consisted of $300,000 capital stock and no
retained earnings. The excess of investment cost over book value of the net
assets acquired related 50% to undervalued inventories (subsequently sold in
20X4) and 50% to goodwill with a 10-year amortization period.
2. Sank sold equipment to Pill for $25,000 on January 1, 20X5, at which time the
equipment had a book value of $10,000 and a five-year remaining useful life.
(Included in plant assets in the financial statements.)
3. During 20X6 Sank sold land to Pill at a profit of $10,000. (Included in plant
assets in the financial statements.)
4. Plier uses the equity method in accounting for its investment in Sank.
Required : Prepare consolidation working papers for Pill Corporation and Subsidiary for
the year ended December 31, 20X6.