Tugas23
Separate company financial statements for Pin Corporation and its 90%-owned subsidiary, Sit Corporation, for the year ended December 31, 20X8 are summarized as follows :
Pin Sit
Combined Income and Retained Earnings Statements for the Year Ended December 31, 20X8
Sales
Income from Sit
Cost of goods sold
$1,265,000
85,000
$ 600,000
-
(800,000) (300,000)
Depreciation expense
Other expenses
Loss on plant assets
Net income
Add : Beginning retained earnings
Deduct : Dividends
Retained earnings December 31, 20X8
(180,000) (70,000)
(120,000) (120,000)
-
250,000 100,000
300,000 150,000
(150,000)
$ 400,000
(10,000)
(50,000)
$ 200,000
Balance Sheet at December 31, 20X8
Cash
Receivable
Inventory
Plant and equipment
Accumulated depreciation
Investment in Sit
Total assets
Current liabilities
Other liabilities
Capital stock
Retained earnings
Total equities
$ 220,000 $ 160,000
200,000 160,000
170,000 140,000
1,417,500 720,000
(272,500) (180,000)
765,000
$2,500,000
$ 300,000 $ 100,000
300,000 200,000
1,500,000 500,000
400,000 200,000
$2,500,000
-
$1,000,000
$1,000,000

Additional Information
1.
Pin acquired an 80% interest in Sit’s common stock on January 5, 20X5 for
$600,000 and an additional 10% interest on July 1, 20X8 for $82,500. These two acquisitions were made in the open market at regularly quoted exchange prices.
2.
Sit’s capital stock and retained earnings on January 1, 20X5 were $500,000 and
$100,000, respectively.
3.
Any difference between investment cost and book value acquired relates to assets not specifically identifiable and is amortized over a 10-year period.
4.
Sit paid dividends of $25,000 on April 1 and October 1 of 20X8.
5.
Pin sold $50,000 merchandise is included in Sit’s December 31, 20X8 inventory.
Sit owed Pin $20,000 from intercompany purchases at December 31, 20X8.
6.
The amount of intercompany profit in Sit’s beginning inventory on goods acquired from Pin amounted to $5,000.
7.
Sit sold machinery with a book value of $40,000 to Pin for $30,000 on July 2,
20X8. at the time of sale, the machinery had a remaining useful life of five years and was being depreciated by Pin on a straight-line basis.
Required : Prepare the consolidation working papers for Pin and Subsidiary for the year ended on December 31, 20X8.