Combined Income & Retained Statement

For the year ended December 31, 2011 Angel Devil

Income Statement
Sales $ 1,876.00 $ 1,400.00
Gain on plant assets $ 36.00 $ -
Bond interest income $ - $ 6.00
Income from Devil $ 206.80 $ -
COGS $ (1,004.00) $ (780.00)
Depreciation expense $ (190.55) $ (126.88)
Bond interest expense $ (30.00) $ -
Other Expense $ (325.25) $ (173.62)
Net Income $ 569.00 $ 325.50
Retained Earning
Retained Earning, Jan 1, 2010 $ 440.00 $ 235.00
Add : Net Income $ 569.00 $ 325.50
Less : Dividend $ (395.00) $ (200.00)
Retained Earning, Dec 31, 2010 $ 614.00 $ 360.50
Balance Sheet
Assets
Cash $ 121.25 $ 204.00
Bond interest receivable $ - $ 7.50
Accounts receivable $ 154.95 $ 135.00
Inventories $ 188.00 $ 131.00
Land $ 210.00 $ 234.00
Building-net $ 410.00 $ 286.00
Equipment-net $ 315.00 $ 356.00
Investment in Devil $ 852.80
Investment in Angel's Bond $ 163.50
Total Asset $ 2,252.00 $ 1,517.00
Liabilities and Stockholders' Equity
Accounts payable $ 323.00 $ 306.50
Bond interest payable $ 15.00 $ -
10% Bonds payable $ 300.00 $ -
Capital Stock $ 1,000.00 $ 850.00
Retained Earning $ 614.00 $ 360.50
Total Liabilities and Stockholders' equity $ 2,252.00### $ 1,517.00
a Good will
Implied fair value ( $800,000.00 / 80% ) $ 1,000,000.00
Book value $ 975,000.00
Excess investment cost to book value acquired $ 25,000.00

b Income from Sudsidiary and noncontrolling interest share

Description Income From

- Share of subsidiary net income $ 260,400.00
- Realized profit on beginning inventories $ 24,500.00
- Unrealized profit on ending inventories $ (38,000.00)
- Piecemeal gain on sale of equipment $ 6,400.00
- Unrealized profit on sale of land $ (36,000.00)
- Piecemeal gain on sale of building $ 3,000.00
- Unrealized loss on sale of bonds $ (15,000.00)
- Realized loss on sale of bonds $ 1,500.00
Total $ 206,800.00

Investment
Description Account
- Share of ending equity 968,400.00
- Good will $ 20,000.00
- Unrealized profit on ending inventories $ (38,000.00)
- Unrealized profit on sale of equipment $ (25,600.00)
- Unrealized profit on sale of land $ (36,000.00)
- Unrealized profit on sale of building $ (22,500.00)
- Unrealized profit on sale of bonds $ (13,500.00)
Total $ 852,800.00

- Share x beginning equity $ 868,000.00

- Add : Goodwill $ 20,000.00
- Less : unrealised profit on inventory $ (24,500.00)
- Less : unrealized gain on building $ (25,500.00)
- Less : unrealised gain on equipment $ (32,000.00)
- Beginning investment $ 806,000.00
- Income from Devil $ 206,800.00
- Dividend $ (160,000.00)
- Ending Investment $ 852,800.00

c Consolidation journal entries

a Sales $ 130,000.00
 COGS

b Investment in Devil $ 24,500.00

COGS

c COGS $ 38,000.00
Inventory

d Investment in Devil $ 32,000.00

Noncontrolling interest $ 8,000.00
Accumulated depreciation - equipment $ 24,000.00
Equipment

e Accumulated depreciation - equipment $ 8,000.00

Depreciation expense

f Gain on sale of land $ 36,000.00

Land

g Investment in Devil $ 25,500.00

Accumulated depreciation - building $ 4,500.00
Building

h Accumulated depreciation - building $ 3,000.00

Depreciation Expense - Building

i Bonds interest income $ 6,000.00

Loss on retirement of bonds $ 1,500.00
Bonds interest expense

j Bonds payable $ 150,000.00

Loss on retirement of bonds $ 13,500.00
Investment in Angel bonds

k Income from Devil $ 206,800.00

Dividend
Investment in Devil

l Noncontrolling interest share $ 66,700.00

Dividend
Noncontrolling interest

m Capital stock $ 850,000.00

 Retained Earning $ 235,000.00
Goodwill $ 25,000.00
Investment in Devil
Noncontrolling interest

n Cash $ 34,000.00
Account receivable

o Interest payable $ 7,500.00

Interest receivable

d Consolodation working paper

Combined Income & Retained Statement
Angel Devil
For the year ended December 31, 2011
Income Statement
Sales $ 1,876.00 $ 1,400.00 a
Gain on plant assets $ 36.00 $ - f
Loss on retirement of bonds i
j
Bond interest income $ - $ 6.00 i
Income from Devil $ 206.80 $ - k
COGS $ (1,004.00) $ (780.00) c

Depreciation expense $ (190.55) $ (126.88)

Bond interest expense $ (30.00) $ -

Other Expense $ (325.25) $ (173.62)
Noncontrolling interest share l
Net Income $ 569.00 $ 325.50

Retained Earning
Retained Earning, Jan 1, 2010 $ 440.00 $ 235.00 m
Add : Net Income $ 569.00 $ 325.50
Less : Dividend $ (395.00) $ (200.00)

Retained Earning, Dec 31, 2010 $ 614.00 $ 360.50

Balance Sheet
December 31, 2010
Assets
Cash $ 121.25 $ 204.00 n
Bond interest receivable $ - $ 7.50
Accounts receivable $ 154.95 $ 135.00
Inventories $ 188.00 $ 131.00
Land $ 210.00 $ 234.00
Building-net $ 410.00 $ 286.00 g
h
Equipment-net $ 315.00 $ 356.00 d
e
Investment in Devil $ 852.80 b
d
g
Investment in Angel's Bond $ 163.50
Goodwill m
Total Asset $ 2,252.00 $ 1,517.00

Liabilities and Stockholders' Equity

Accounts payable $ 323.00 $ 306.50
Bond interest payable $ 15.00 $ - o
10% Bonds payable $ 300.00 $ - j
Capital Stock $ 1,000.00 $ 850.00 m
Retained Earning $ 614.00 $ 360.50
Total Liabilities and Stockholders' equity $ 2,252.00### $ 1,517.00

Noncontrolling Interest d
 Noncontrolling
Interest Share
$ 65,100.00
$ -
$ -
$ 1,600.00
$ -
$ -
$ -
$ -
$ 66,700.00

Noncontrolling
Interest
242,100.00
$ 5,000.00
$ -
$ (6,400.00)
$ -
$ -
$ -
$ 240,700.00

$ 217,000.00
$ 5,000.00
$ -
$ -
$ (8,000.00)
$ 214,000.00
$ 66,700.00
$ (40,000.00)
$ 240,700.00
$ 130,000.00

$ 24,500.00

$ 38,000.00

$ 64,000.00

$ 8,000.00

$ 36,000.00

$ 30,000.00

$ 3,000.00

$ 7,500.00

$ 163,500.00

$ 160,000.00
$ 46,800.00

$ 40,000.00
$ 26,700.00
$ 888,000.00
$ 222,000.00

$ 34,000.00

$ 7,500.00

Consolidated
Adjustment and Elimination
Statement

$ 130.00 $ 3,146.00
$ 36.00 $ -
$ 1.50 $ (15.00)
$ 13.50
$ 6.00 $ -
$ 206.80 $ -
$ 38.00 a $ 130.00 $ (1,667.50)
b $ 24.50
e $ 8.00 $ (306.43)
h $ 3.00
i $ 7.50 $ (22.50)
$ (498.87)
$ 66.70 $ (66.70)
$ 569.00

$ 235.00 $ 440.00
$ 569.00
k $ 160.00 $ (395.00)
l $ 40.00
$ 614.00

$ 34.00 $ 359.25
o $ 7.50 $ -
 n $ 34.00 $ 255.95
c $ 38.00 $ 281.00
f $ 36.00 $ 408.00
$ 4.50 g $ 30.00 $ 673.50
$ 3.00
$ 24.00 d $ 64.00 $ 639.00
$ 8.00
$ 24.50 k $ 46.80 $ -
$ 32.00 m $ 888.00
$ 25.50
j $ 163.50 $ -
$ 25.00 $ 25.00
$ 2,641.70

$ 629.50
$ 7.50 $ 7.50
$ 150.00 $ 150.00
$ 850.00 $ 1,000.00
$ 614.00

$ 8.00 l $ 26.70 $ 240.70

m $ 222.00

$ 1,929.50 $ 1,929.50 $ 2,641.70