Problem 20

Part A
Penuin CGS
Snow CGS
Elimination of 2012
Deferred Revene 2011
Deffered Revenue of 2012
CGS

290,000
197,000
(110,000)
(8,000)
12,000
381,000

Penguins inv
Snow Inv
Deferred Rev
Conolidated Inventory

346,000
110,000
(12,000)
444,000

Noncontrolling interest was downstream so this does

not affect the deferrel
The noncontrolling interest
58,000
20%
11,600

Part B
Penuin CGS
Snow CGS
Elimination of 2012
Deferred Revene 2011
Deffered Revenue of 2012

Penguins inv
Snow Inv
Deferred Rev
Conolidated Inventory

290,000
197,000
(80,000)
(6,000)
10,000
411,000
346,000
110,000
(10,000)
446,000

Upstream it does affect the income

Net Income
58,000
Deferred Revene 2011
6,000
Deffered Revenue of 2012
(10,000)
54,000
20%
10,800

Part C
Penguin Building
Snow building
Overstatement of building
Removal of depreciation
Building

358,000
157,000
-30000
12,000
497,000

Penguin operating expenses

Snow operating expenses
Depreciation Expense
Total Operating Expenses

150,000
105,000
6,000
261,000

Noncontrolling Interest
Because it was down stream there is no
effect on non controlling interest
They still report the net income at
11,600 like in part A

Problem 24
Part A
Consolidated Net Income
Income from Slaughter
Income from Bennett
Unpatented technology
Excess in equipment
Excess Deprecation Expense
Net Income
Part B
Net Income
Unpatented Technology
Non controlling interest
Adjusted Net Income
Non Controlling interest
Consoldiated Net Income

220,000
90,000
(8,000)
(50,000)
10,000
262,000

262,000
(8,000)
90,000
82,000
8,200
253,800

Part C
Reported Net Income
Unpatented Technoloy
Excess in equipment
Excess Depreciation expense
Net Income
Outside ownership
Non controlling interest

90,000 Net Income

(8,000) Non controlling interest
(50,000) Net Income
10,000
42,000
10%
4,200

Part D
Slaughter Net Income
Bennett Net Income
Amoritzation Expense
Depreciation Expense
Net Income

240,000
100,000
(8,000)
10,000
342,000

262,000
(4,200)
257,800

Problem 36
Consideration
Book Value
Excess Fair value over book value
Trademark
Patented Technology
Life of asset
Depreciation Expense

450,000
300,000
150,000
30,000
120,000
8
15,000

Skyline Income
Depreciation Expense on Patented Technology
Defferal on gain of land
Unrealized gross profit at beginning
Unrealized gross profit at end
Equity in Skyline

(88,000)
15,000
18,000
(14,400)
14,000
(55,400)

Entry *G
Retained Earning 1/1
Cost of Goods Sold

14,400
14,400

Entry S
Common Stock
Additional Paid in Captial
Retained Earning 1/1
Investment in Skyline

120,000
30,000
277,600

Entry A
Trademark
Patented Technology
Investment in Skyline

30,000
105,000

Entry I
Investment income
Investment in Skyline

55,400

Entry D
Investment in Skyline
Dividends Distributed

20,000

Entry E
Operating Expenses
Patented Technology

15,000

Entry TI

427,600

135,000

55,400

20,000

15,000

Revenues
Cost of good sold

80,000
80,000

Entry G
Cost of Goods Sold
Inventory

14,000

Entry TL
Gain on Sale of land
Land

18,000

Entry P
Accounts Payable
Acccounts Receviable

65,000

14,000

18,000

65,000

Beginning Inventory
Gross Profit Percent
Unrealized Gross Profit at Beg.

36,000
40%
14,400

Ending Inventory
Gross Porfit Percentage
Unrealized Gross Profit at End

28,000
50%
14,000

Accounts
Revenues
Cost of Goods Sold

Parkway Inc
Skyline Corporation
(627,000)
(358,000) TI
289,000
195,000 G

Other Operating Expenses

Gain on Sale of land
Equity in Skyline's earning
Net Income
Retained Earning 1/1

170,000
(18,000)
(55,400)
(241,400)
(314,600)

75,000
(88,000)
(292,000)

Net Income
Dividends Distributed
Retained Earning 12/31/11
Cash and receivables
Inventory
Investment in Skyline

(241,400)
70,000
(486,000)
134,000
281,000
598,000

(88,000)
20,000
(360,000)
150,000
112,000
D

Trademarks
Land, building, and equip
Patented Technology
Total Assets
Liabilities
Common Stock
Additional Paid in Capital
Retained Earning 12/31/11
Total Liabilities and equity

637,000
1,650,000
(463,000)
(410,000)
(291,000)
(486,000)
(1,650,000)

50,000
283,000
130,000
725,000
(215,000)
(120,000)
(30,000)
(360,000)
(725,000)

E
TL
I
G*
S

Consolidated Entries
80,000
14,000 G*
14,400
TI
80,000
15,000
18,000
55,400
14,400
277,600
D
P
G*
20,000 S
A
I

20,000
65,000
14,000
427,600
135,000
55,400

30,000

TL
105,000 E

P
S
S

65,000
120,000
30,000
844,400

18,000
15,000

844,400

Consolidated Totals
(905,000)
403,600
260,000
(241,400)
(314,600)
(241,400)
70,000
(486,000)
219,000
379,000
-

80,000
902,000
220,000
1,800,000
(613,000)
(410,000)
(291,000)
(486,000)
(1,800,000)