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The partial trial balances of P Co. and S Co. at December 31, Year 10, were as follows: Investment in S. Co. Common shares Retained earnings, beginning of year Additional Information P Co. Dr 198,000 162,000 137,000 Dr S Co. Cr. 156,000 68,500

The partial trial balances of P Co. and S Co. at December 31, Year 10, were as follows: Investment in S. Co. Common shares Retained earnings, beginning of year Additional Information P Co. Dr 198,000 162,000 137,000 Dr S Co. Cr. 156,000 68,500

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
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Problem 20BEA: The income statement, statement of retained earnings, and balance sheet for Somerville Company are...
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The partial trial balances of P Co. and S Co. at December 31, Year 10, were as follows: Investment in S. Co. Common shares Retained earnings, beginning of year P Co. S Co. $72,000 60,000 Dr 198,000 Balance, beginning of year Add: Net income Less: Dividends Retained earnings, Dec. 31 P Co. Cr. Additional Information The investment in the shares of S Co. (a 90% interest) was acquired January 2, Year 6, for $198,000. At that time, the shareholders' equity of S Co. was common shares of $156,000 and retained earnings of $32,000 and the common shares for P Co. of $162,000. • Net incomes of the two companies for the year were as follows: Common Shares $ 162000 162,000 137,000 0 0 $ 162000 Dr During Year 10, sales of P Co. to S Co. were $22,000, and sales of S Co. to P Co. were $62,000. Rates of gross profit on intercompany sales in Years 9 and 10 were 30% of sales. • On December 31, Year 9, the inventory of P Co. included $19,000 of merchandise purchased from S Co., and the inventory of S Co. included $15,000 of merchandise purchased from P Co. On December 31, Year 10, the inventory of P Co. Included $32,000 of merchandise purchased from S Co., and the inventory of S Co. included $17,000 of merchandise purchased from P Co. • During the year ended December 31, Year 10, P Co. paid dividends of $24,000 and S Co. paid dividends of $22,000. At the time that P Co. purchased the shares of S Co., the acquisition differential was allocated to patents of S Co. These patents are being amortized for consolidation purposes over a period of five years. In Year 8, land that originally cost $52,000 was sold by S Co. to P Co. for $63,200. The land is still owned by P Co. Assume a corporate tax rate of 40%. Required: Prepare a consolidated statement of changes in equity for the year ended December 31, Year 10. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. Omit $ sign in your response.) S Co. P Co. Consolidated Statement of Changes in Equity For Year Ended December 31, Year 10 Cr. $ 156,000 68,500 Retained Earnings $ 24000 $ Total 24000 Non-controlling Interest $ Total $ $
Transcribed Image Text:The partial trial balances of P Co. and S Co. at December 31, Year 10, were as follows: Investment in S. Co. Common shares Retained earnings, beginning of year P Co. S Co. $72,000 60,000 Dr 198,000 Balance, beginning of year Add: Net income Less: Dividends Retained earnings, Dec. 31 P Co. Cr. Additional Information The investment in the shares of S Co. (a 90% interest) was acquired January 2, Year 6, for $198,000. At that time, the shareholders' equity of S Co. was common shares of $156,000 and retained earnings of $32,000 and the common shares for P Co. of $162,000. • Net incomes of the two companies for the year were as follows: Common Shares $ 162000 162,000 137,000 0 0 $ 162000 Dr During Year 10, sales of P Co. to S Co. were $22,000, and sales of S Co. to P Co. were $62,000. Rates of gross profit on intercompany sales in Years 9 and 10 were 30% of sales. • On December 31, Year 9, the inventory of P Co. included $19,000 of merchandise purchased from S Co., and the inventory of S Co. included $15,000 of merchandise purchased from P Co. On December 31, Year 10, the inventory of P Co. Included $32,000 of merchandise purchased from S Co., and the inventory of S Co. included $17,000 of merchandise purchased from P Co. • During the year ended December 31, Year 10, P Co. paid dividends of $24,000 and S Co. paid dividends of $22,000. At the time that P Co. purchased the shares of S Co., the acquisition differential was allocated to patents of S Co. These patents are being amortized for consolidation purposes over a period of five years. In Year 8, land that originally cost $52,000 was sold by S Co. to P Co. for $63,200. The land is still owned by P Co. Assume a corporate tax rate of 40%. Required: Prepare a consolidated statement of changes in equity for the year ended December 31, Year 10. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. Omit $ sign in your response.) S Co. P Co. Consolidated Statement of Changes in Equity For Year Ended December 31, Year 10 Cr. $ 156,000 68,500 Retained Earnings $ 24000 $ Total 24000 Non-controlling Interest $ Total $ $
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