1.

ALLOCATION SCHEDULE
80% 20% 100%
Parent NCI Total
Share Share
Purchase Price and Implied Value 1,600,000 400,000 2,000,000

Less Book Value of Equity Acquired :

Common Stock 960,000 240,000 1,200,000
Retained Earnings 640,000 160,000 800,000
1,600,000 400,000 2,000,000

Difference Between Implied and Book Value - - -

Allocate to : - - -
Balance - - -

Intercompany Sale of Fixed Asset (P to S)

2014 Accumulated Remaining
Cost Depreciation Carrying Value Life
Original Cost 400,000 160,000 240,000 15 yr
Intercompany Selling Price 360,000 - 360,000 15 yr
Difference 40,000 160,000 120,000

Increase in Retained Earnings from 2012 to 2015

Retained Earnings, 2015 1,040,000
Retained Earnings, 2012 (800,000)
240,000
Increase in Investment in S (80% share) 192,000
NCI (20% share) 48,000

2. INCOME STATEMENT (CONSOLIDATION)

For Year Ended 2015 Elimination
P S... Debit Credit
Sales 1,475,000 1,110,000
Equity In Subsidiary Income 108,000
8,000
Dividend Income 80,000
Cost Of Goods Sold (942,000) (795,000)
Other Expense (include Depreciato (145,000) (90,000)
Depreciation Expense 8,000

Income Tax Expense (187,200) (90,000)

Non Controlling Interest

280,800 135,000 116,000 8,000

3. RETAINED EARNINGS (CONSOLIDATION)

 For Year Ended 2016 Elimination
P S... Debit Credit
Retained Earnings, Beginning 1,300,000 1,040,000 1,040,000
Net Income 280,800 135,000 116,000 8,000
Dividend Declared (120,000) (100,000) 80,000

Retained Earnings, Ending 1,460,800 1,075,000 1,156,000 88,000

4. BALANCE SHEET (CONSOLIDATION)

For Year Ended 2016 Elimination
P S... Debit Credit
Current Asset 568,000 271,000
Fixed Assets 1,972,000 830,000 40,000
Accumulated Depreciation-Fixed As (375,000) (290,000) 16,000 160,000
Other Assets 1,000,800 1,600,000
Investment in S 1,600,000 120,000 1,600,000
116,000
192,000
80,000 8,000

4,765,800 2,411,000

Liabilities 305,000 136,000

Common Stock 3,000,000 1,200,000 1,200,000
Retained Earnings, ending 1,460,800 1,075,000 1,156,000 88,000

Non Controlling Interest, Beginning 400,000

Increase in Retained Earnings 48,000
Additional in Non-controlling Interest
Non Controlling Interest, Ending
4,765,800 2,411,000 2,612,000 2,612,000
-

1 Journal Entries in P
Date
1/1/2012 Investment in S 1,600,000
Cash 1,600,000
(to record acquisition of S on January 1, 2012)

1/1/2014 Cash 360,000

Accumulated Depreciation-Fixed Assets 160,000
Fixed Asset 400,000
Gain on Sale of Fixed Asset 120,000
(to record the sales of Fixed Asset)
 Investment in S 8,000
12/31/2014 Equity in Subsidiary Income 8,000
(to record excess of depreciation expenses when sold)

12/31/2015 Investment in S (135,000 x 80%) 108,000

Equity in Subsidiary Income 108,000
(to record net income from S)

12/31/2015 Investment in S 8,000

Equity in Subsidiary Income 8,000
(to record excess of depreciation expenses when sold)

2 Elimination Entries
12/31/2015 Equity in Subsidiary Income 116,000
Investment in S ((135,000 x 80%)+8,000) 116,000
(to record income of S)

12/31/2015 Investment in S (100,000 x 80%) 80,000

Dividend Declared 80,000
(to record dividend from S)

12/31/2015 Fixed Asset 40,000

Investment in S 120,000
Accumulated Depreciation-Fixed Assets 160,000

Accumulated Depreciation-Fixed Assets 16,000

Depreciation Expense 8,000
Investment in S 8,000
(to adjust depreciation expense to its original cost)

12/31/2015 Common Stock-S 1,200,000

Retained Earnings-S 1,040,000
Investment in S (1,600,000 + 192,000) 1,792,000
Non Controlling Interest (400,000 + 48,000) 448,000
Depreciation
16,000
24,000
8,000

Consolidated
NCI Balances 5
2,585,000
(108,000)
(8,000)
80,000
(1,737,000)
(235,000)
8,000
-
(277,200)
27,000 (27,000)
-
27,000 280,800
 Consolidated
NCI Balances
1,300,000
27,000 280,800
(20,000) (120,000)

7,000 1,460,800

Consolidated
NCI Balances
839,000
2,842,000
(809,000)
2,600,800
120,000
(116,000)
(192,000)
72,000
-

- 5,356,800

441,000
3,000,000
7,000 1,460,800

448,000
455,000
455,000 5,356,800
-

Journal Entries in S

Fixed Asset 360,000

Cash 360,000
 Investment in S 35,100

Eliminate Dividend Declared

Investment In S 31,500

Dividend Declared-S 31,500

1. ALLOCATION SCHEDULE
90% 10% 100%
30-Jun-14 Parent NCI Total
Share Share
Purchase Price and Implied Value 426,000 47,333 473,333.33

Less Book Value of Equity Acquired :

Capital Stock 270,000 30,000 300,000
Additional Paid In Capital 45,000 5,000 50,000
Retained Earnings 54,000 6,000 60,000
369,000 41,000 410,000

Difference Between Implied and Book Value 57,000 6,333 63,333

Allocate to : Manufacturing Formula (57,000) (6,333) (63,333)
Balance - - -

Intercompany Sale of Equipment (P to S)

2014 Accumulated
Cost Depreciation Carrying Value
Original Cost 100,000 50,000 50,000
Intercompany Selling Price 97,500 - 97,500
Difference 2,500 50,000 47,500

2015 Intercompany Sale of Land (S to P) with profit $15,000

Investment in S 90%
Non Controlling Interest 10%

Increase in Retained Earnings from 2014to 2016

Retained Earnings, 2016 139,500
Retained Earnings, 2014 (60,000)
79,500
Increase in Investment in S (90% share) 71,550
NCI (10% share) 7,950

2. INCOME STATEMENT (CONSOLIDATION)

2016 For Year Ended 2016 Elimination
P S... Debit
Sales 2,555,500 1,120,000
Equity In Subsidiary Income 160,650
9,500
Dividend Income 54,000
Cost Of Goods Sold (1,730,000) (690,500)
Expenses (include Depreciaton Expense) (654,500) (251,000)
Depreciation Expense
Manufacturing Formula Depreciation 12,667
Non Controlling Interest
 Manufacturing Formula Depreciation

225,000 178,500 182,817

3. RETAINED EARNINGS (CONSOLIDATION)

For Year Ended 2016 Elimination
P S... Debit
Retained Earnings, Beginning 595,000 139,500 139,500
Net Income 225,000 178,500 182,817
Dividend Declared (100,000) (60,000)

Retained Earnings, Ending 720,000 258,000 322,317

4. BALANCE SHEET (CONSOLIDATION)

For Year Ended 2016 Elimination
P S... Debit
Cash 119,500 132,500
Account Receivable 342,000 125,000
Inventory 362,000 201,000
Other Current Assets 40,500 13,000
Land 150,000
Investment in S 426,000 47,500

Increase in Retained Earnings

54,000
Accumulated Manufacturing Formula 17,100
Gain on Sale of Land 13,500
Property and Equipment 825,000 241,000 2,500
Accumulated Depreciation-Property and (207,000) (53,500) 19,000
Difference Between Implied and Purchase Value 63,333
Manufacturing Formula 63,333

2,058,000 659,000

Account Payable 295,000 32,000

Other Liabilities 43,000 19,000
Capital Stock 1,000,000 300,000 300,000
Additional Paid In Capital 50,000 50,000
Retained Earnings, ending 720,000 258,000 322,317

Non Controlling Interest, Beginning

Gain on Sale of Land 1,500
Accumulated Manufacturing Formula 1,900
Increase in Retained Earnings
Additional in Non-controlling Interest
Non Controlling Interest, Ending
 2,058,000 659,000 955,983

1 Journal Entries in P
Date
6/30/2014 Investment in S 426,000
Cash 426,000
(to record acquisition of S on June 30, 2014)

12/31/2014 Cash 97,500

Accumulated Depreciation-Equipment 50,000
Equipment 100,000
Gain on Sale of Equipment 47,500
(to record the sales of Equipment)

Investment in S 9,500
Equity in Subsidiary Income 9,500
(to record excess of depreciation expenses when sold)

2015 S sold land to P, cannot create sales journal entry because limited information. Only knew profit $15,000
12/31/2015 Equity in Subsidiary Income 13,500
Investment in S (15,000 x 90%) 13,500
(to record parent share from gain of land sold)

12/31/2016 Investment in S (178,500 x 90%) 160,650

Equity in Subsidiary Income 160,650
(to record net income from S)

12/31/2016 Investment in S 9,500

Equity in Subsidiary Income 9,500
(to record excess of depreciation expenses when sold)

2 Elimination Entries
12/31/2016 Equity in Subsidiary Income 170,150
Investment in S ((178,500 x 90%)+9,500) 170,150
(to record income of S)

12/31/2016 Investment in S (100,000 x 90%) 54,000

Dividend Declared 54,000
(to record dividend from S)

12/31/2016 Equipment 2,500

Investment in S 47,500
Accumulated Depreciation-Fixed Assets 50,000
(to eliminate unrealized profit on intercompany sale of equipment)
 Accumulated Depreciation-Fixed Assets 19,000
Depreciation Expense 9,500
Investment in S 9,500
(to adjust depreciation expense to its original cost)

12/31/2016 Capital Stock-S 300,000

Paid in Capital-S 50,000
Retained Earnings-S 139,500
Difference Between Implied and Purchase Value 63,333
Investment in S (426,000 + 71,550) 497,550
Non Controlling Interest (47,333 + 7,950) 55,283
(to eliminate investment in S)

Manufacturing Formula 63,333

Difference Between Implied and Purchase Value 63,333
(to allocate the difference between implied and book value)

Investment in S (12,667 x 90% x 1.5 period) 17,100

Noncontrolling Interest (12,667 x 10% x 1.5 period) 1,900
Expenses ($63,333/5) 12,667
Manufacturing Formula 31,667
(to amortize the difference between implied and book value)

Investment in S (15,000 x 90%) 13,500

Noncontrolling Interest (15,000 x 10%) 1,500
Land 15,000
(to eliminate unrealized profit on intercompany sale of land)
 5 years @ 12,666.67

o S)
Remaining Depreciation
Life 20% of purchase price
5 yr 10,000
5 yr 19,500
9,500

with profit $15,000

13,500
1,500

Elimination Consolidated
Credit NCI Balances
3,675,500
(160,650)
(9,500)
54,000
(2,420,500)
(905,500)
9,500 9,500
(12,667)
17,850 (17,850)
 (1,267) 1,267

-
9,500 16,583 213,600

Elimination Consolidated
Credit NCI Balances
595,000
9,500 16,583 213,600
54,000 (6,000) (100,000)

63,500 10,583 708,600

Elimination Consolidated
Credit NCI Balances
252,000
467,000
563,000
53,500
15,000 135,000
426,000 47,500
170,150 (170,150)
71,550 (71,550)
9,500 44,500
17,100
13,500
1,068,500
50,000 (291,500)
63,333 -
31,667 31,667

- 2,160,067

327,000
62,000
1,000,000
-
63,500 10,583 708,600

47,333

7,950
51,883
62,467
 955,983 62,467 2,160,067
- -

Journal Entries in S

Equipment 97,500
Cash 97,500

ation. Only knew profit $15,000

 Investment in S 35,100

5 Eliminate Dividend Declared

Investment In S 31,500

Dividend Declared-S 31,500