Chapter 3 Practice Problem 1

Worksheet Set-Up
Consolidated
Parent Sub Dr Cr Totals

Revenues (200,000) (120,000) (320,000)

Expenses 120,000 100,000 E 10,000 230,000
Equity in Sub Income (10,000) I 10,000 0
Net Income (90,000) (20,000) (90,000)

Retained Earnings 1/1 (570,000) (120,000) S 120,000 (570,000)

Net Income (90,000) (20,000) (90,000)
Dividends Declared 15,000 5,000 D 5,000 15,000
Retained Earnings 12/31 (645,000) (135,000) (645,000)

Cash 350,000 57,000 407,000

Accounts Receivable 80,000 15,000 95,000
Inventory 40,000 35,000 75,000
Investment in Sub 255,000 D 5,000 S 170,000
A 80,000
I 10,000 0
Buildings - net 270,000 90,000 A 20,000 E 2,000 378,000
Equipment - net 110,000 48,000 A 40,000 E 8,000 190,000
Goodwill A 20,000 20,000
Total Assets 1,105,000 245,000 1,165,000

Accounts Payable (20,000) 0 (20,000)

Mortgage Payable (40,000) (60,000) (100,000)
Common Stock (100,000) (40,000) S 40,000 (100,000)
APIC (300,000) (10,000) S 10,000 (300,000)
Retained Earnings (645,000) (135,000) (645,000)
Total Liabilities and Equity (1,105,000) (245,000) 275,000 275,000 (1,165,000)