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Akl Soal 3 - Kelompok 2

This document contains solutions to accounting problems involving consolidation of financial statements. It includes solutions for multiple choice and problems involving the calculation of goodwill, consolidated income statements and balance sheets, allocation of fair values in a business combination, and noncontrolling interests. The solutions demonstrate how to properly consolidate financial information from parent and subsidiary companies.

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0% found this document useful (0 votes)
2K views9 pages

Akl Soal 3 - Kelompok 2

This document contains solutions to accounting problems involving consolidation of financial statements. It includes solutions for multiple choice and problems involving the calculation of goodwill, consolidated income statements and balance sheets, allocation of fair values in a business combination, and noncontrolling interests. The solutions demonstrate how to properly consolidate financial information from parent and subsidiary companies.

Uploaded by

M Khairi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Kelompok 2

Alma Sukma W F1319003


Auliya Rachmawati F1319010
Mustika Khairi F1319040
Triani Febrianti F1319060

CASE SOLUTION

E3-1

1. B
2. C
3. D
4. D
5. B
6. A

E 3-2

1. D
2. B
3. D
4. D
5. A
6. A
7. B

E3-3

1. C Advance to Hill $75,000 + receivable from Ward $200,000 = $275,000


2. A Zero, goodwill has an indeterminate life and is not amortized.
3. A Pow accounts for Sap using the equity method, therefore, consolidated retained
earnings is equal to Pow’s retained earnings, or $2,480,000.
4. D Zero, all intercompany receivables and payables are eliminated.
E3-4

(in thousands)
1. Implied fair value of San ($1,800 / 90%) $2,000
Less: Book value of San (1,800)
Excess fair value over book value $ 200
Equipment undervalued $ (60)
Goodwill at January 1, 2011 $ 140
Goodwill at Dec 31, 2011 = Goodwill from consolidation $ 140
Since goodwill is not amortized
2. Consolidated net income
Pin’s reported net income $980
Less: Correction to income from San for depreciation on excess
allocated to equipment [($60,000/3 years)x 90%] $ (18)
Controlling share of consolidated net income $962
Noncontrolling share of consolidated net income
[$200,000 - $20,000 depreciation] x 10% $ 18
Controlling share of consolidated net income $ 962
Consolidated net income $980

E 3-6
Investment in Patricia 450,000
Capital Stock 100,000
Paid in Capital 350,000
Inventories 30,000
Plant Assets 50,000
Accounts Payable 10,000
Goodwill 270,000
Accounts Receivable 10,000
Push-Down Capital 350,000
1. The amount of goodwill will be shown in the balance sheet of Patricia NV is
$270,000.
2. The amount that will push-down capital be shown in the balance sheet of Patricia
NV is $350,000.
E3-7
1. Pasture Corporation and Subsidiary
Consolidated Income Statement
for the year 2007

Sales ($1,000,000 + $400,000) $1,400,000


Less: Cost of sales ($600,000 + $200,000) (800,000)

Gross profit 600,000


Less: Depreciation expense ($50,000 + $40,000) (90,000)
Other expenses ($199,000 + $90,000) (289,000)

Total consolidated income 221,000

Less: Noncontrolling interest income ($70,000  30%) (21,000)

Consolidated net income $ 200,000


2 Pasture Corporation and Subsidiary
Consolidated Income Statement
for the year 2007

Sales ($1,000,000 + $400,000) $1,400,000


Less: Cost of sales ($600,000 + $200,000) (800,000)

Gross profit 600,000


Less: Depreciation expense ($50,000 + $40,000 - $2,000) (88,000)
Other expenses ($199,000 + $90,000) (289,000)

Total consolidated income 223,000

Less: Noncontrolling interest income ($70,000  30%) (21,000)

Consolidated net income $ 202,000


Supporting computations
Depreciation of excess allocated to overvalued equipment:
$10,000/5 years = $2,000
E3-8
1 Capital stock
The capital stock appearing in the consolidated balance sheet at December 31, 2006 is
$1,800,000, the capital stock of Poball,
the parent company.
2 Goodwill at December 31, 2006
Investment cost at January 2, 2006 $700,000

Book value acquired ($600,000  80%) (480,000)

Excess (considered goodwill since no fair value information is given) $220,000


3 Consolidated retained earnings at December 31, 2006
Poball’s retained earnings January 2, 2006 (equal to
beginning consolidated retained earnings $800,000
Add: Net income of Poball (equal to consolidated net 300,000
income)
Less: Dividends declared by Poball (180,000)
Consolidated retained earnings December 31, 2006 $920,000
4 Noncontrolling interest at December 31, 2006
Capital stock and retained earnings of Softcan on
January 2, 2006 $600,000
Add: Softcan’s net income 90,000
Less: Dividends declared by Softcan (50,000)
Softcan’s stockholders’ equity December 31, 2006 640,000
Noncontrolling interest percentage 20%
Noncontrolling interest December 31, 2006 $128,000
5 Dividends payable at December 31, 2006
Dividends payable to stockholders of Poball $ 90,000

Dividends payable to noncontrolling stockholders ($25,000  20%) 5,000

Dividends payable to stockholders outside the


consolidated entity $ 95,000

E3-9

Patta Corporation and Subsidiary


Partial Balance Sheet
at December 31, 2016

Stockholders’ equity:

Capital stock, $10 par $300,000

Additional paid-in capital 50,000

Retained earnings 65,000

Equity of majority stockholders 415,000

Noncontrolling interest* 41,000

Total stockholders’ equity $456,000

* Some students may not classify noncontrolling interest as stockholders’ equity.

Supporting computations

Computation of consolidated retained earnings:

Patta’s December 31, 2015 retained earnings $ 35,000

Add: Patta’s reported income for 2016 55,000


Less: Patta’s dividends (25,000)

Consolidated retained earnings December 31, 2016 $ 65,000

Computation of noncontrolling interest at December 31, 2016:

Qira’s December 31, 2015 stockholders’ equity $200,000

Income less dividends for 2016 ($20,000 - $15,000) 5,000

Qira’s December 31, 2016 stockholders’ equity 205,000

Noncontrolling interest percentage 20%

Noncontrolling interest December 31, 2016 $ 41,000

P3-2

(in thousands)
1. Schedule to allocate fair value/book value differential
Cost of investment in Set $350
Implied fair value of Set ($350 / 70%) $500
Book value of Set (220)
Excess fair value over book value $280

Excess allocated:
Fair Value – Book Value Allocation
Inventories ($100 - $60) $ 40
Land ($120 - $100) 20
Buildings — net ($180 - $140) 40
Equipment — net ($60 - $80) (20)
Other liabilities ($80 - $100) 20
Allocated to identifiable net assets 100
Goodwill for the remainder 180
Excess fair value over book value $280

2. Par Corporation and Subsidiary Consolidated Balance Sheet at January 1, 2011


Assets
Current assets:
Cash ($70 + $40) $110
Receivables — net ($160 + $60) 220
Inventories ($140 + $60 + $40) 240
$ 570
Property, plant and equipment:
Land ($200 + $100 + $20) $320
Buildings — net ($220 + $140 + $40) 400
Equipment — net ($160 + $80 - $20) 220
940
Goodwill (from consolidation) 180
Total assets $1,690

Liabilities and Stockholders’ Equity


Liabilities:
Accounts payable ($180 + $160) $ 340
Other liabilities ($20 + $100 - $20) 100
$ 440
Stockholders’ equity: Capital stock $1,000
Retained earnings 100
Equity of controlling stockholders 1,100
Noncontrolling interest * 150
1,250
Total liabilities and stockholders’ equity $1,690

* 70% of implied fair value of $500 = $150


P 3-3
Cost of investment in Softback Books January 1, 2006 $ 2,700,000
Book value acquired ($2,500,000 x 80%) 2,000,000
Excess cost over book value acquired $ 700,000
Schedule to Allocate Cost – Book Value Differential
Fair Value – Initial Final
Percent Reallocation
Book Value Allocation Allocation
Current Assets $500,000 80% $400,000 $ $400,000
Equipment 1,000,000 80% 800,000 (375,000) 425,000
Other Plant Assets (125,000) (125,000)
Negative Goodwill (500,000) 500,000 -
Excess cost over book value acquired $700,000 0 $700,000

Reallocation of negative goodwill to plant asset:


Equipment $3,000,000/$4,000,000 x $500,000 = $375,000
Other plant assets $1,000,000/$4,000,000 x $500,000 = $125,000

P3-6

Perry Corporation and Subsidiary

Consolidated Balance Sheet Working Papers

at December 31, 2006

Perry Sim Adjustments and Consolidated

per books per books Eliminations Balance Sheet

Cash $ 42,000 $ 20,000 $ 62,000


Receivables — net 50,000 130,000 b 9,000 171,000
Inventories 400,000 50,000 450,000
Land 150,000 200,000 350,000
Equipment — net 600,000 100,000 700,000
Investment in Sim 409,000 a 409,000
Goodwill a 40,000 40,000
Total assets $1,651,000 $ 500,000 $1,773,000
Accounts payable $ 410,000 $ 80,000 $ 490,000
Dividends payable 60,000 10,000 b 9,000 61,000
Capital stock 1,000,000 300,000 a 300,000 1,000,000
Retained earnings 181,000 110,000 a 110,000 181,000
Noncontrolling interest a 41,000 41,000
Total equities $1,651,000 $ 500,000 $1,773,000

a To eliminate reciprocal investment and equity accounts, record unamortized goodwill


($40,000), and enter the noncontrolling interest ($410,000  10%).

b To eliminate reciprocal dividends receivable (included in receivables — net) and


dividends payable amounts ($10,000 dividends  90%).

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