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Palm Corporation and Subsidiary Consolidation Working Papers for the year ended December 31, 2009 Palm Income Statement Sales Income from Sail Cost of goods sold Operating expenses Consolidated NI Noncontrol. share ($15,000 30%) Net income Control. share Retained Earnings Retained earnings Palm Retained earnings Sail Net income Dividends Retained earnings December 31 Balance Sheet Cash Acc. Receiv. net Inventories PP&E net Investment in Sail $ 310,000 10,500 200,000 77,000 70% Sail $ 100,000 a 10,500 65,000 20,000 265,000 97,000 $ 48,000 c 4,500 $ 43,500 $ 15,000 4,500 $ 43,500 Adjustments and Eliminations Consolidated Statements $ 410,000

$ 65,000 $ 11,000 15,000 10,000 $ 16,000 $ 15,000 30,000 20,000 35,000 a 3,500 b 45,500 b 11,000

$ 65,000

43,500 30,000 $ 78,500 $ 45,500 60,000 24,000 120,000 49,000 $ 298,500

43,500 a 7,000 c 3,000 30,000 $ 78,500 $ 60,500 90,000 44,000 155,000

$ 100,000 $ 18,000 12,000 50,000 4,000 16,000 $ 100,000 b 50,000 b 4,000

$ 349,500 $ 48,000 32,000 150,000 20,000 78,500

Accounts payable Other liabilities Capital stock Other paid-in capital Retained earnings

$ 30,000 20,000 150,000 20,000 78,500 $ 298,500

Noncontrolling interest January 1 Noncontrolling interest December 31

b 19,500 c 1,500 21,000 $ 349,500

Palm Corporation and Subsidiary Consolidated Income Statement for the year ended December 31, 2009 Sales Less: Cost of goods sold Gross profit Operating expenses Total consolidated income Less: Noncontrolling interest share Controlling share of consolidated net income Palm Corporation and Subsidiary Consolidated Retained Earnings Statement for the year ended December 31, 2009 Consolidated retained earnings January 1 Add: Controlling share of onsolidated net income Less: Dividends of Palm Consolidated retained earnings December 31 Palm Corporation and Subsidiary Consolidated Balance Sheet at December 31, 2009 Assets Current assets: Cash Receivables net Inventories Plant assets net Total assets Liabilities and Stockholders Equity Liabilities: Accounts payable Other liabilities Stockholders equity: Capital stock, $10 par Other paid-in capital Consolidated retained earnings Add: Noncontrolling interest $ 60,500 90,000 44,000 $410,000 265,000 145,000 97,000 48,000 4,500 $ 43,500

$ 65,000 43,500 (30,000) $ 78,500

$194,500 155,000 $349,500

$ 48,000 32,000 $150,000 20,000 78,500 248,500 21,000

$ 80,000

269,500

Total liabilities and stockholders equity

$349,500