Nama: Alya Sufi Ikrima

NIM: 041911333248
Kelas: A1-SP
Tugas Pertemuan 10 – Consolidations—Changes in Ownership Interests

E 8-8 Subsidiary issues additional stock under different assumptions

Required:
1. Assume that Pam purchases all 100,000 shares of common stock directly from Sun.
a. What is Pam’s percentage ownership interest in Sun after the purchase?
700,000/1,000,000 = 70%
b. Calculate goodwill from Pam’s acquisition of the 100,000 shares of Sun.
Book value of interest after sale $2,600 x 70% $1,820
Book value of interest before sale $2,100 x 2/3 1,400
Book value of interest acquired 420
Cost of interest 500
Goodwill from additional investment* $80
* This implies total goodwill is now equal to $114,286.
2. Assume that the 100,000 shares of common stock are sold to Van Company, one of Sun’s
noncontrolling stockholders.
a. What is Pam’s percentage ownership interest after the new shares are sold to Van?
600,000/1,000,000 = 60%
b. Calculate the change in underlying book value of Pam’s investment after the sale.
Sat’s underlying equity after sale $2,600,000
Pam’s interest 60%
Book value of Pam’s investment in Sat after the sale 1,560,000
Less: Book value before the sale 1,400,000
Increase in book value of investment $160,000
c. Prepare the journal entry on Pam’s books to recognize the increase or decrease in
underlying book value computed in b above assuming that gain or loss is not recognized.
Investment in Sat 160,000
Additional paid-in capital 160,000
E 8-11 Treasury stock by subsidiary
Required:
1. Calculate the ownership percentage of Nora NYRT in Bence NYRT after the treasury
stock transaction.
Number of shares owned by Nora NYRT (70% x 9,000) 6,300
Percentage ownership of Nora NYRT in Bence NYRT (6,300 / 8,000) 78.75%
2. Prepare a journal entry to adjust investment in Bence NYRT account.
Bence NYRT’s equity before treasury stock transaction $450,000
Cost of treasury stock ($60 x 1,000) ($60,000)
Bence NYRT’s equity after treasury stock transaction $390,000
Nora NYRT’s equity in Bence NYRT after the transaction $307,125
($390,000 x 78.75%)
Nora NYRT’s equity in Bence NYRT before the transaction $315,000
($450,000 x 70%)
Decrease in Nora NYRT’s equity in Bence NYRT ($ 7,875)

Journal entry:
January 4
Additional paid-in capital 7,875
Investment in Bence NYRT 7,875
3. Calculate the amount of investment in Bence NYRT after the transaction.
January 3, 2014 balance $350,000
Less: adjustment due to treasury stock transaction ($ 7,875)
Investment in Bence NYRT after the transaction $342,125