Tugas19
Comparative separate company and consolidated balance sheets for Pharm Corporation
and its 80%-owned subsidiary, Silky Corporation, at year end 20X2 are as follows :
Pharm
Silky
Consolidated
$ 180,000
$ 40,000
$ 220,000
200,000
160,000
360,000
70,000
150,000
170,000
Plant assets-net
500,000
350,000
850,000
Investment in Silky
630,000
-
-
-
-
150,000
$1,580,000
$700,000
$1,750,000
$
80,000
$ 50,000
$ 120,000
100,000
50,000
110,000
1,000,000
500,000
1,000,000
400,000
100,000
400,000
-
-
120,000
$1,580,000
$700,000
Assets
Cash
Inventories
Other current assets
Goodwill
Equities
Accounts payable
Dividends payable
Capital stock, $10 par
Retained earnings
Minority interest
$1,750,000
Investigation reveals that the consolidated balance sheet is in error because Pharm
Corporation has not amortized goodwill and it has not eliminated unrealized inventory
profits. The investment in silky was acquired on January 1, 20X1at a price $150,000 in
excess of the book value and fair value. The original plan was to amortize goodwill over
20 years. Unrealized profits in silky’s December 31, 20X1 and 20X2 inventories of
merchandise acquired from Pharm were $30,000 and $50,000, respectively.
Intercompany receivables of $10,000 are included in other current assets.
Required : Prepare consolidated balance sheet working papers on December 31, 20X2 for
Pharm Corporation and Subsidiary.