Nama : Marselinus Aditya Hartanto Tjungadi

NIM : A31113316
Advanced Accounting 2 (Akuntansi Keuangan Lanjutan 2)

Problem 7-3
Income from Sum for 2011:

Share of reported income of Sum ($200,000  75%) $ 150,000

Add: Unrealized profit in beginning inventory of Sum 24,000
Less: Unrealized profit in ending inventory of Sum (30,000)
Add: Piecemeal recognition of gain on sale of equipment
to Pad ($48,000/6 years) 75% 6,000
Less: Unrealized gain on sale of land to Sum (20,000)
Less: Unrealized gain on sale of building to Sum less
piecemeal recognition through depreciation ($40,000 - $2,000) (38,000)
Add: Gain on constructive retirement of Pad bonds
($200,000 - $188,000) 12,000
Income from Sum $ 104,000

Investment in Sum at December 31, 2011:

Underlying equity in Sum ($1,040,000  75%) $780,000
Less: Unrealized profit in Sum’s ending inventory (30,000)
Less: Unrealized gain on equipment sold to Pad
($48,000 - $24,000 recognized)  75% (18,000)
Less: Unrealized gain on sale of land to Sum (20,000)
Less: Unrealized gain on sale of building to
Sum ($40,000 - $2,000 recognized) (38,000)
Add: Gain on constructive retirement of Pad’s bonds 12,000
Investment in Sum December 31 $686,000

Noncontrolling interest share:

Net income of Sum $200,000
Add: Piecemeal recognition of gain on equipment ($48,000/6 years) 8,000
Sum’s realized income 208,000
Noncontrolling interest percentage 25%
Noncontrolling interest share $ 52,000

Consolidation workpaper entries

a Cash 20
Other receivables 20

b Sales 100
Cost of sales 100

c Investment in Sum stock 24

Cost of sales 24

d Cost of sales 30
Inventories 30

e Noncontrolling interest 8
Investment in Sum stock 24
Depreciation expense 8
Equipment 24

f Gain on land 20
Land 20

g bonds payable (10%) 200

Gain on bonds 12
Investment in Pad bonds 188
h Income from Sum 104
Investment in Sum stock 16
Dividends 120

i Retained earnings (Sum) 200

Common stock 800
Investment in Sum stock 750
Noncontrolling interest 250

j Bond interest payable 10

Bond interest receivable 10

k Noncontrolling interest share 52

Dividends 40
Noncontrolling interest 12

l Gain on building 40
Depreciation expense 2
Buildings 38

Pad Corporation and Subsidiary

Consolidation Working Paper
for the year ended December 31, 2011
(in thousands)
Adjustments and Consolidated
Pad Sum 75% Eliminations Statements
Income Statement
Sales $ 1,260 $ 1,000 b 100 $2,160
Gain on land 20 f 20
Gain on building 40 m 40
Income from Sum 104 H 104
Gain on bonds g 12 12
Cost of sales 700* 600* D 30 b 100
c 24 1,206*
Depreciation expense 152* 80* e 8
m 2 222*
Interest expense 40* 40*
Other expenses 92* 120* 212*
Consolidated NI 492
Noncontrolling int. share k 52 52*
Controlling share of NI $ 440 $ 200 $ 440
Retained Earnings
Retained earnings — Pad $ 300 $ 300
Retained earnings — Sum $ 200 i 200
Controlling share of NI 440 200 440
Dividends 320* 160* h 120
k 40 320*
Retained earnings
December 31 $ 420 $ 240 $ 420
Balance Sheet
Cash $ 54 $ 162 a 20 $ 236
Bond interest receivable 10 j 10
Other receivables 80 60 a 20 120
Inventories 160 100 d 30 230
Land 180 140 f 20 300
Buildings — net 300 360 m 38 622
Equipment — net 280 180 e 24 436
Investment in Sum stock 686 c 24 i 750
e 24
h 16
Investment in Pad bonds 188 g 188
$1,740 $1,200 $1,944

Accounts payable $100 $ 160 $ 260

Bond interest payable 20 j 10 10
10% bonds payable 400 g 200 200
Common stock 800 800 i 800 800
Retained earnings 420 240 420
$1,740 $1,200
Noncontrolling interest January 1 e 8 i 250
Noncontrolling interest December 31 k 12 254
* Deduct $1,944

Problem 7-6

Income from Sal for 2012:

Share of reported income of Sal ($100,000  75%) $ 75,000
Add: Unrealized profit in beginning inventory of Sal 12,000
Less: Unrealized profit in ending inventory of Sal (15,000)
Add: Piecemeal recognition of gain on sale of equipment
to Par ($24,000/6 years) 75% 3,000
Less: Unrealized gain on sale of land to Sal (10,000)
Less: Unrealized gain on sale of building to Sal less
piecemeal recognition through depreciation ($20,000 - $1,000) (19,000)
Add: Gain on constructive retirement of Par bonds
($100,000 - $94,000) 6,000
Income from Sal for 2012 $ 52,000

Investment in Sal at December 31, 2012:

Underlying equity in Sal ($520,000  75%) $390,000

Less: Unrealized profit in Sal’s ending inventory (15,000)
Less: Unrealized gain on equipment sold to Par
($24,000 - $12,000 recognized)  75% (9,000)
Less: Unrealized gain on sale of land to Sal (10,000)
Less: Unrealized gain on sale of building to
Sal ($20,000 - $1,000 recognized) (19,000)
Add: Gain on constructive retirement of Par’s bonds 6,000
Investment in Sal December 31 $343,000
Noncontrolling interest share:
Net income of Sal $100,000
Add: Piecemeal recognition of gain on
equipment ($24,000/6 years) 4,000
Sal’s realized income 104,000
Noncontrolling interest percentage 25%
Noncontrolling interest share $ 26,000

Consolidation workpaper entries

a Cash 10
Other receivables 10

b Sales 50
Cost of sales 50

c Investment in Sal stock 12

Cost of sales 24

d Cost of sales 15
Inventories 15
e Noncontrolling interest 4
Investment in Sal stock 12
Depreciation expense 4
Equipment 12

f Gain on land 30
Depreciation expense 1
Land 10
Buildings 19

g bonds payable (10%) 100

Gain on bonds 6
Investment in Par bonds 94

h Income from Sum 52

Investment in Sal stock 8
Dividends 60

i Retained earnings (Sal) 100

Common stock 400
Investment in Sal stock 375
Noncontrolling interest 125

j Bond interest payable 5

Bond interest receivable 5

k Noncontrolling interest share 26

Dividends 20
Noncontrolling interest 6

Par Corporation and Subsidiary

Consolidation Working Papers for
the year ended December 31, 2012
(in thousands)
Adjustments and Consolidated
Par Sal 75% Eliminations Statements
Income Statement
Sales $ 630 $ 500 b 50 $1,080
Gain on plant 30 f 30
Income from Sal 52 h 52
Gain on bonds g 6 6
Cost of sales 350* 300* d 15 b 50
c 12 603*
Depreciation expense 76* 40* e 4
f 1 111*
Interest expense 20* 20*
Operating expense 46* 60* 106*
Consolidated NI 246
Noncontrolling int. share k 26 26*
Controlling share of NI $ 220 $ 100 $ 220

Retained Earnings
Retained earnings — Par $ 150 $ 150
Retained earnings — Sal $ 100 i 100
Controlling share of NI 220 100 220
Dividends 160* 80* h 60
k 20 160*
Retained earnings
December 31 $ 210 $ 120 $ 210

Balance Sheet
Cash $ 27 $ 81 a 10 $ 118
Bond interest receivable 5 j 5
Other receivables 40 30 a 10 60
Inventories 80 50 d 15 115
Land 90 70 f 10 150
Buildings — net 150 180 f 19 311
Equipment — net 140 90 e 12 218
Investment in Sal stock 343 c 12 i 375
e 12
h 8
Investment in Par bonds 94 g 94
$ 870 $ 600 $ 972
Accounts payable $ 50 $ 80 $ 130
Bond interest payable 10 j 5 5
10% bonds payable 200 g 100 100
Common stock 400 400 i 400 400
Retained earnings 210 120 210
$ 870 $ 600
Noncontrolling interest January 1 e 4 i 125
Noncontrolling interest December 31 k 6 127
$ 972
* Deduct