Professional Documents
Culture Documents
An indirect holding of the stock of an affiliate gives the investor an ability to control or significantly
influence the decisions of an investee not directly owned through an investee that is directly owned. Two
primary types of indirect ownership situations are the father-son-grandson relationship and the connecting
affiliates relationship.
No. Only 40 percent of Ts stock is held within the affiliation structure and P owns indirectly only 24
percent (60% 40%) of T. T should be included as an equity investment in the consolidated statements of
P Company and Subsidiaries.
An indirect holding involves the ability of one corporation to control another by virtue of its control over
one or more other corporations. An investor has the ability to control or significantly influence an investee
that is not directly owned through an investee that is directly owned. A mutual holding affiliation structure
is a special type of indirect holding where affiliates indirectly own themselves. In a mutual holding
situation, the affiliates hold ownership interests in each other.
The parents direct and indirect ownership of Subsidiary B is 49 percent (70% 70%). However,
consolidation of Subsidiary B is still appropriate because 70 percent of Bs stock is held within the
affiliation structure and only 30 percent is held by the noncontrolling stockholders of B.
Approach A
Pat
Sam
Stan
Pat
$200,000
+184,000
$384,000
Sam
$160,000
Stan
$100,000
+ 70,000
-70,000
-184,000
$ 46,000
$30,000
9-2
When the schedule approach for allocating income is used, investment income from the lowest subsidiary
must be added to the separate income of the next subsidiary to determine that subsidiarys net income
before it can be allocated to the next subsidiary, and so on.
7
Separate earnings
Deduct: Unrealized profit
Separate realized earnings
Allocate S2s income
Allocate S1s income
Ps net income
Noncontrolling int. share
P
$20,000
S1 80%
$10,000
- 1,000
S2 70%
$5,000
20,000
9,000
+ 3,500
-10,000
5,000
-3,500
0
$ 2,500
$1,500
+10,000
$30,000
S1s investment in S2 account was not adjusted for the unrealized profits because this would create a
disparity between S1s investment in S2 account and S1s share of S2s equity.
8
A mutual holding situation exists because two affiliates hold ownership interests in each other. The parent
is mutually owned.
The treasury stock approach considers parent stock held by a subsidiary to be treasury stock of the
consolidated entity. Accordingly, the subsidiary investment account is maintained on a cost basis and is
deducted at cost from stockholders equity in the consolidated balance sheet.
10
In situations in which a subsidiary holds stock in the parent, both the conventional and treasury stock
approaches are acceptable, but they do not result in equivalent consolidated financial statements. The
consolidated retained earnings and noncontrolling interest amounts will usually be different because of
different amounts of investment income. The treasury stock approach is not applicable when the mutually
held stock involves subsidiaries holding the stock of each other.
11
12
The theory is that parent stock purchased by a subsidiary is, in effect, returned to the parent and
constructively retired. By recording the constructive retirement of the parent stock on parent books, parent
equity will reflect the equity of stockholders outside the consolidated entity. Also, recording the
constructive retirement, by reducing parent stock and retained earnings to reflect amounts applicable to
controlling stockholders outside the consolidated entity, will establish consistency between capital stock
and retained earnings for the parents outside stockholders and parent net income, dividends, and earnings
per share which also relate to the outside stockholders of the parent.
13
14
For eliminating the effect of mutually held parent stock, two generally accepted approaches are usedthe
treasury stock approach and the conventional approach. But when the mutually held stock involves
subsidiaries holding stock of each other, the treasury stock approach is not applicable.
Chapter 9
15
9-3
By adding beginning noncontrolling interest and noncontrolling interest share (determined by multiplying
the companys net income by the noncontrolling interest percentage) and subtracting the noncontrolling
interests percentage of dividends, the noncontrolling interest can be determined without use of
simultaneous equations.
SOLUTIONS TO EXERCISES
Solution E9-1
Pen
Sal
Tip
$1,600
$1,000
$400
762
$2,362
30
240
(762)
(240)
____
$160
$508
Solution E9-2
Pub Corporation and Subsidiaries
Income Allocation Schedule
for the year 2011
(in thousands)
Sam
Pub
Separate earnings or loss
$800
$300
Allocate Sams income:
180
(180)
to Pub ($300,000 60%)
(60)
to Tim ($300,000 20%)
Allocate Tims loss:
(272)
to Pub $(340,000) 80%
Controlling Share of Consol. Income
$708
Noncontrolling interest share
$ 60
Tim
$(400)
60
272
$ (68)
Solution E9-3
Place Corporation and Subsidiaries
Income Allocation Schedule
for the year 2011
Lake
Place
Separate incomes
$200,000
$80,000
Less: Unrealized profit on land
_______
(20,000)
Separate realized incomes
200,000
60,000
Allocate Lakes income
60% to Place
36,000
(36,000)
20% to Marsh
(12,000)
Allocate Marshs income
_______
70% to Place
57,400
Controlling Share of Consol. Income
$293,400
Noncontrolling interest share
$12,000
Marsh
$ 70,000
______
70,000
12,000
(57,400)
$ 24,600
9-4
Solution E9-4
1
c
Income from Son is equal to:
70% of Sons $160,000 income
70% of Sons 80% interest in Tans
$100,000 income
Income from Son
$112,000
56,000
$168,000
d
Noncontrolling interest share is equal to:
30% direct noncontrolling interest in Sons
$160,000 income
20% direct noncontrolling interest in Tans
$100,000 income
30% 80% indirect noncontrolling interest in
Tans $100,000 income
Total noncontrolling interest share
24,000
$ 92,000
d
Consolidated net income is equal to:
Combined separate incomes of $360,000 + $160,000 +
$100,000
Less: Noncontrolling interest share
Controlling interest share of Consolidated net income
$620,000
92,000
$528,000
Alternative computation:
Pins separate income
Add: 70% of Sons $160,000 income
Add: (70% 80%) of Tans $100,000 income
Controlling interest share of Consolidated net income
$360,000
112,000
56,000
$528,000
$ 48,000
20,000
Solution E9-5
Separate earnings
Less: Unrealized profit
Separate realized
earnings
Allocate Vals income
70% to Tea
Allocate Wons income
10% to Tea
60% to Sal
Allocate Teas income
80% to Pal
10% to Sal
Allocate Sals income
80% to Pal
Pals net income (or
Controlling share of
consolidated net
income)
Noncontrolling interest
share
Pal
$ 50,000
Sal
$30,000
50,000
30,000
Tea
$35,000
- 5,000
30,000
Won
$(20,000)
_______
(20,000)
+28,000
- 2,000
-12,000
+ 44,800
+ 18,880
Val
$40,000
________
40,000
- 28,000
+ 2,000
+ 12,000
+ 5,600
-44,800
- 5,600
-18,880
________
________
_________
$ 4,720
$ 5,600
$ (6,000)
$12,000
$113,680
Chapter 9
9-5
Solution E9-6
Separate earnings
Unrealized profit
Separate realized earnings
Allocate Oaks income
20% to Nun
70% to Man
Allocate Nuns income
70% to Pet
10% to Man
Allocate Mans income
90% to Pet
Pets net income (or
Controlling share of NI)
Noncontrolling interest share
Pet
$ 65,000
65,000
Man
$18,000
- 4,000
14,000
Nun
$28,000
+ 2,000
30,000
Oak
$9,000
-4,000
5,000
+ 1,000
-1,000
-3,500
+ 3,500
+ 21,700
+ 18,540
+ 3,100
-21,700
- 3,100
-18,540
________
$ 2,060
$ 6,200
________
$105,240
$
500
Alternative solution
Adjusted
Adjustments =
Income
$ 65,000
+
-
Pet
Man
18,000
$4,000
14,000a
12,600
$1,400
Nun
28,000
2,000
30,000b
23,700
6,300
Oak
9,000
4,000
5,000c
3,940
1,060
$105,240
$8,760
$114,000
a
b
c
Consolidated
Net Income
$ 65,000
Noncontrolling
Interest
=
Share
0
Reported
Income
$65,000
9-6
Solution E9-7
1
b
Separate income of Tar
Included in consolidated net income (.9 .7 $400,000)
Alternative solution
Direct noncontrolling interest (.3 $400,000)
Indirect noncontrolling interest (.1 .7 $400,000)
a
Separate income = net income of Van
Noncontrolling interest (direct)
c
Total separate incomes
Less: Controlling share of Consolidated net
income
Pan $1,240,000 100%
Sin $350,000 90%
Tar $400,000 90% 70%
Win $(100,000) 90% 60%
Van $240,000 90% 80%
$ 120,000
28,000
$ 148,000
$240,000
20%
$ 48,000
$2,130,000
$1,240,000
315,000
252,000
(54,000)
172,800
$400,000
(252,000)
$ 148,000
10%
37%
46%
28%
interest share
a
[See computations for question 3]
d
Net income of Sin
Separate income
Add: 70% of Tars $400,000
Deduct: 60% of Wons $(100,000)
Add: 80% of Vans $240,000
Net income of Sin
Pans interest
Investment increase
Less: Dividends received from Sin ($200,000 90%)
Net increase
(1,925,800)
$ 204,200
$
35,000
148,000
(46,000)
67,200
204,200
350,000
280,000
(60,000)
192,000
$ 762,000
90%
685,800
(180,000)
$ 505,800
Chapter 9
9-7
Solution E9-8
b
Separate income of Sam (net income)
Separate income of Ten $40,000 - ($80,000 10%)
Separate income of Pat
$240,000 - ($40,000 70%) - ($80,000 80%)
Total separate income
$ 80,000
32,000
148,000
$260,000
d
Separate income
Unrealized profit on inventory
Unrealized profit on land
Separate realized income
Pat
$148,000
________
$148,000
Sam
$80,000
(10,000)
_______
$70,000
Ten
$32,000
(15,000)
$17,000
a
Pats separate income
$148,000
56,000
Add: Investment income from Sam ($70,000 80%)
Add: Investment income from Ten
16,800
[$17,000 + ($70,000 10%)] 70%
Pats income (controlling share of consolidated net income) $220,800
d
Total separate realized income
Less: Controlling share of consolidated net income
Noncontrolling interest share
Alternative solution
Direct noncontrolling interest in Sam ($70,000 .1)
Indirect noncontrolling interest in Sam
($70,000 .3 .1)
Direct noncontrolling interest in Ten ($17,000 .3)
Noncontrolling interest share
$235,000
220,800
$ 14,200
$
7,000
2,100
5,100
$ 14,200
Solution E9-9
9-8
Solution E9-10
$340,000
40,000
20,000
$400,000
Chapter 9
9-9
Supporting computations
A = Pins income on a consolidated basis
B = Sons income on a consolidated basis
C = Tins income on a consolidated basis
A = $190,000 + .8B + .7C
B = $170,000 + .15C
C = $230,000 + .25A
Solve for A
A = $190,000 + .8[$170,000 + .15($230,000 + .25A)] + .7($230,000 + .25A)
A = $190,000 + $136,000 + $27,600 + .03A + $161,000 + .175A
A = $514,600 + .205A
.795A = $514,600
A = $647,295.59
Determine C
C = $230,000 + .25($647,295.59)
C = $391,823.89
Determine B
B = $170,000 + .15($391,823.90)
B = $228,773.58
Allocate income to controlling share of consolidated net income and
noncontrolling interest
Controlling Share of Consolidated net income ($647,295.59 75%)
Noncontrolling interest Son ($228,773.58 20%)
Noncontrolling interest Tin ($391,823.90 15%)
Total consolidated income
$485,471.69
45,754.72
58,773.59
$590,000.00
9-10
Solution E9-12
1
d
Combined separate income
Less: Noncontrolling interest share
Controlling Share of Consolidated net income
$160,000
6,750
$153,250
Alternatively:
Pets separate income
Add: Sods net income of $67,500 90%
Less: Dividends received from Pet ($50,000 15%)
Controlling interest share of Consolidated net income
$100,000
60,750
(7,500)
$153,250
b
P
.865P
P
S
=
=
=
=
$151,330
8,670
$160,000
Solution E9-13
1
$245,700
26,900
(21,000)
6,000
$257,600
Supporting computations
Computation of income from Sat:
Sats separate income
Add: Sats dividend income from Pug
Sats net income
Pugs ownership interest
Pugs equity in Sats income
Less: Dividends paid to Sat ($60,000 10%)
Less: Excess amortization ($9,000 x 70%)
Income from Sat
$ 50,000
6,000
56,000
70%
39,200
(6,000)
(6,300)
$ 26,900
Conventional approach
=
=
=
=
Chapter 9
9-11
S = $50,000 + .1($159,892)
S = $65,989
Pugs net income and controlling share
($159,892 90%)
Noncontrolling interest share ($65,989 30%)
Total income
$143,903
19,797
$163,700
$143,903
120,000
$ 23,903
Or alternatively,
($65,989 70%) - ($159,892 10%) - $6,300 excess
$ 23,903
$245,700
23,903
(21,000)
$248,603
9-12
SOLUTIONS TO PROBLEMS
Solution P9-1
Pad Corporation and Subsidiaries
Schedule to Compute Controlling Share of Consolidated Net Income and
Noncontrolling Interest Share
for the year 2011
Separate income (loss)
Pad
$500,000
Sal
$300,000
500,000
300,000
______
130,000
(20,000)
(14,000)
Ban
$(20,000)
(20,000)
Axe
$150,000
78,000
(12,000)
352,000
316,800
(40,000)
14,000
(78,000)
(316,800)
$ 35,200
$ 52,000
$ (6,000)
Check:
Income allocated: $776,800 consolidated net income + $35,200 noncontrolling
interest share in Sal + $52,000 noncontrolling interest share in Axe - $6,000
noncontrolling interest share (loss) in Ban = $858,000
Income to allocate: $500,000 Pad income + $300,000 Sal income + $130,000
realized income of Axe - $20,000 loss of Ban - $52,000 patent = $858,000
Controlling share of consolidated net income: $500,000 - $40,000 +
90%($300,000 - $12,000) + (90% 60% $130,000) - (90% 70% $20,000) =
$776,800
Chapter 9
9-13
Solution P9-2
1
Seas books
Investment in Toy (70%)
294,000
Cash
294,000
To record purchase of a 70% interest in Toy Corporation.
Cash
14,000
Investment in Toy (70%)
To record dividends received from Toy ($20,000 70%).
14,000
35,000
$ 42,000
(7,000)
$ 35,000
Pots books
Cash
48,000
Investment in Sea (80%)
To record dividends received from Sea ($60,000 80%).
48,000
88,000
$108,000
(20,000)
$ 88,000
9-14
Pot
$300,000
(20,000)
Sea
$100,000
Toy
$ 60,000
(10,000)
280,000
100,000
50,000
(35,000)
35,000
135,000
108,000
(108,000)
$388,000
$ 27,000
_______
$ 15,000
Sea
Toy
Assets
Investment in Sea (80%)
Investment in Toy (70%)
Total assets
$ 1,848,000 $460,000
440,000
___________ 315,000
$ 2,288,000 $775,000
$540,000
Liabilities
Capital stock
Retained earnings
Total liabilities and equity
$100,000
300,000
140,000
$540,000
300,000 $200,000
1,200,000 400,000
788,000 175,000
$ 2,288,000 $775,000
________
$540,000
Chapter 9
9-15
Solution P9-3
Preliminary computations
Check on consolidated net income
Net income as stated
Less: Investment income
Separate income
Add: Unrealized profit in
beginning inventory
Less: Unrealized profit in
ending inventory
Separate realized incomes
Allocate Tips income
50% to Pen
40% to Sir
Sirs net income
Allocate Sirs income
80% to Pen
Less: Depreciation on excess
allocated to plant and
Equipment
Total income of consolidated
Entity
Controlling share of NI
Noncontrolling int. share
Pen
$184,500
(84,500)
100,000
Sir
$90,000
(10,000)
80,000
Tip
$25,000
25,000
Total
$299,500
(94,500)
205,000
8,000
_______
108,000
8,000
_______
80,000
2,500
2,000
82,000
65,600
(65,600)
(5,000)
( 1,250)
________
$171,100
(20,000)
5,000
(20,000)
193,000
(2,500)
(2,000)
(6,250)
________
_______
$ 15,150
500
$186,750
171,100
15,650
$186,750
$420,000
$ 525,000
(500,000)
$ 25,000
$ 75,000
$ 150,000
(120,000)
$ 30,000
6,250
9-16
$500,000
72,000
12,500
240,000*
Other expenses
Sir
Tip
$300,000
$100,000
10,000
150,000*
60,000*
70,000*
15,000*
160,000*
Noncont.int.share Sir
Noncont.int.share Tip
Cont.int.shareof NI
$184,500
$ 90,000
Adjustments and
Eliminations
h
d
a
i
50,000
72,000
22,500
20,000
f
c
6,250
15,150
500
Consolidated
Statements
$
g
h
8,000
50,000
850,000
412,000*
251,250*
15,150*
500*
$ 25,000
171,100
95,000
Retained Earnings
Retained earnings
Retained earnings
Retained earnings
Pen
$115,500
45,000
184,500
80,000*
Dividends
Retained earnings
December 31
Balance Sheet
Cash
Accounts receivable
Inventories
Plant and
equipment net
Investment in
Sir 80%
Investment in
Tip 50%
Investment in
Tip 40%
Goodwill
Accounts payable
Other liabilities
Capital stock
Retained earnings
90,000
40,000*
12,500
g
8,000
e 160,000
160,000
Sir
Tip
Net income
45,000
171,100
25,000
10,000*
$220,000
$210,000
$ 60,000
$ 67,000
70,000
110,000
$ 36,000
50,000
75,000
$ 10,000
20,000
35,000
140,000
425,000
115,000
a
c
d
25,000
74,000
b
$990,000
$660,000
$180,000
$ 70,000
100,000
600,000
$ 40,000
10,000
400,000
$ 15,000
5,000
100,000
$990,000
210,000
$660,000
186,100
$
j
i
10,000
20,000
113,000
130,000
200,000
18,750
686,250
30,000
30,000
$1,159,250
10,000
b 100,000
e 400,000
115,000
115,000
600,000
186,100
60,000
$180,000
e 117,000
19,500
6,650
80,000*
d 40,000
e 468,000
a
7,500
b 87,500
a
6,000
b 68,000
508,000
95,000
220,000
9,000
9,000
32,000
143,150
$1,159,250
Deduct
Chapter 9
9-17
Solution P9-4
Income allocation
Definitions
P = Pars income on a consolidated basis
S = Sits income on a consolidated basis
T = Tots income on a consolidated basis
Equations
P = $200,000 + .8S + .5T
S = $100,000 + .2T
T = $50,000 + .1S
Solve for S
S = $100,000 + .2($50,000 + .1S)
S = $110,000 + .02S
.98S = $110,000
S = $112,244.90 or $112,245
Compute T
T = $50,000 + .1($112,244.90)
T = $50,000 + $11,224.49
T = $61,224.49 or $61,224
Compute P
P = $200,000 + .8($112,244.90) + .5($61,224.49)
P = $320,408.16 or $320,408
Income allocation
Controlling share of consolidated net income = P =
Noncontrolling interest share in Sit ($112,245 .1)
Noncontrolling interest share in Tot ($61,224 .3)
$320,408
11,225
18,367
$350,000
9-18
$293,673.48
11,020.40
15,306.12
$320,000.00
Chapter 9
9-19
Solution P9-5
Working paper entries
a
Income from Sun
27,000
Dividend income
10,000
Dividends
28,000
Investment in Sun
9,000
To eliminate income from Sun, dividend income, and 90% of Suns
dividends, and return the investment in Sun account to the
beginning-of-the-period balance under the equity method.
b
200,000
Capital stock Sun
200,000
Retained earnings Sun
Goodwill
50,000
Investment in Sun
405,000
45,000
Noncontrolling interest beginning
To eliminate reciprocal investment and equity accounts, and enter
beginning-of-the-period goodwill and noncontrolling interest.
Treasury stock
80,000
Investment in Pin
To reclassify investment in Pin to treasury stock.
80,000
9-20
400,000
27,000
177,000
Retained Earnings
Retained earnings Pin
300,000
100,000
10,000
50,000*
30,000*
200,000*
50,000*
Consolidated NI
Noncontrolling share
Controlling share of NI
200,000
30,000
Dividends
100,000*
20,000*
Balance Sheet
Other assets
Investment in Sun 90%
250,000*
80,000*
170,000
3,000
377,000
210,000
486,000
414,000
420,000
167,000
300,000
b 200,000
a
d
900,000
123,000 $
400,000
377,000
900,000 $
90,000*
377,000
906,000
500,000
50,000
956,000
90,000
200,000 b 200,000
210,000
500,000
a
9,000
b 405,000
c 80,000
b
28,000
2,000
$
80,000
50,000
3,000*
167,000
Liabilities
Capital stock
Retained earnings
45,000
1,000
213,000
400,000
377,000
46,000
80,000
$
500,000
27,000
10,000
30,000
177,000
Consolidated
Statements
$
a
a
Retained earnings
December 31
Adjustments and
Eliminations
Sun 90%
80,000*
956,000
Deduct
Chapter 9
9-21
Solution P9-6
Calculations
Income from Sip
Par separate income (140,000 - 80,000)
Sip separate income (100,000 + 3,000 - 60,000)
$ 60,000
$ 43,000
Formula:
P income = Adjusted Par income + % interest S income
Adjusted Par income = $60,000 + $2,000 delayed gain on land
- $4,000 patent amortization (80%)
S income = Sip income + % interest P income
P income = $58,000 + 80% ($43,000 + 20% P income)
P income = $92,400 + .16 P income
P income = $110,000
S income = $43,000 + 20% $110,000
S income = $65,000
Controlling share of consolidated net income = P income % outstanding
Controlling share = $88,000
Noncontrolling share = S income % outstanding
Noncontrolling share = $12,000 [($65,000 - $5,000 amortiz.) x 20%]
Income from Sip = consolidated income less P separate income
Income from Sip = $28,000 ($88,000-$60,000)
Working paper entries
a
Investment in Sip
2,000
Gain on sale of land
To recognize previously deferred gain on sale of land.
b
2,000
Dividend income
4,000
Investment in Sip
To eliminate intercompany dividends paid to Sip
4,000
Investment in Sip
Investment in Par
To eliminate reciprocal investments.
100,000
100,000
50,000
Capital stock Sip
180,000
Retained earnings Sip
Patent
20,000
Investment in Sip
195,710
54,290
Noncontrolling interest beginning
To eliminate reciprocal investment and equity accounts, and enter
beginning-of-the-period patent and noncontrolling interest.
Expenses
5,000
Patent
To record current years amortization of patent.
5,000
12,000
4,000
8,000
9-22
Chapter 9
9-23
140,000
28,000
80,000*
88,000
405,710
Adjustments and
Eliminations
Sip 90%
100,000
c
28,000
4,000 b
3,000
60,000* f
4,000
12,000
Consolidated
Statements
$
240,000
5,000
145,000*
100,000
12,000*
88,000
405,710
2,000
5,000
47,000
Retained Earnings
Retained earnings Par
88,000
16,000*
180,000
e 180,000
88,000
47,000
20,000*
477,710
207,000
448,000
109,710
157,000
c
g
100,000
e
$
557,710
80,000
477,710
557,710 $
16,000*
$
477,710
605,000
15,000
620,000
a
2,000
d 100,000
Investment in Par
Patent
Capital stock
Retained earnings
16,000
4,000
b
4,000
c 12,000
e 195,710
d 100,000
20,000 f
5,000
257,000
50,000 e
207,000
257,000
50,000
80,000
477,710
e
g
54,290
8,000
$
62,290
620,000
Deduct
9-24
Solution P9-7
Preliminary Computations
Pans investment cost
$340,000
$425,000
(400,000)
$ 25,000
$258,261
21,739
$280,000
32,000
Investment in Set
To record receipt of 80% of Sets dividends.
32,000
10,000
10,000
Chapter 9
9-25
9-26
10,000
Investment in Pan (10%)
10,000
To record receipt of dividends from Pan ($100,000 10%).
Set
80,000
28,696
$ 108,696
Pan
$200,000
58,261
$258,261
Pan
$416,000
(160,000)
58,261
10,000
(32,000)
$292,261
Set
Pan
$1,440,000 $500,000
258,261
108,696
(90,000) (40,000)
$1,608,261 $568,696
$568,696
20%
$ 113,739
Alternative solution
Noncontrolling interest January 1, 2013 ($500,000 20%)
Noncontrolling interest share ($108,696 20%)
Noncontrolling interest dividends
Noncontrolling interest at December 31, 2013
$ 100,000
21,739
(8,000)
$ 113,739
Set
$ 160,000
28,696
(10,000)
$ 178,696
Chapter 9
9-27
Investment in Set
160,000
Investment in Pan
160,000
To eliminate investment in Pan balance and increase the
investment in Set for the constructive retirement of Pans
stock that was charged to the investment in Set account.
Dividends
Investment in Set
To eliminate dividends.
10,000
10,000
300,000
Capital stock Set
200,000
Retained earnings Set
Goodwill
25,000
Investment in Set
416,000
Noncontrolling interest
109,000
To eliminate Sets equity account balances and the
investment in Set, enter beginning-of-the-period goodwill
and noncontrolling interest.