Preliminary computations (in thousands)

Cost of 70% investment in Stu $1400

Implied fair of Stu($1,400 / 70%) $2000
Book value of Stu (100%) 1600
Excess $400
Excess allocated:
Invetories $40
Plant assets 160
Goodwill 200
Excess 400

Investment balance at January 1, 2011 $1400

Share of Stu’s retained earnings increase( $120 x 70% ) 84
Less: amortization'
70% of excess allocated to inventories (sold in 2011) -28
70% of excess allocated to plant assets ($160 /8 years) -14
Investment balance at December 31, 2011 $1442

Noncontrolling interest at December 31

30% of Stu’s book value at December 31 ($1,720 x 30%) $516
30% of Goodwill 60
30% Unamortized excess for plant assets
30% x ($160 - $20 amortization) 42
Noncontrolling at December 31 (fair value) $618

Pop Corporation and Subsidiary

Consolidated Balance Sheet Working Papers at December 31, 2011
70% (in thousands)
Pop Stu Adjustments and Consolidated
Eliminations Balance Sheet
Cash $ 120 $ 40 $ 160
Accounts receivable — net 880 400 1,280
Accounts receivable — Pop 20 b 20
Dividends receivable 14 c 14
Inventories 1,000 640 1,640
Land 200 300 500
Plant assets — net 1,400 700 a 140 2,240
Investment in Stu 1,442 a 1,442
Goodwill a 200 200
Assets $5,056 $2,100 $6,020

Accounts payable $ 600 $ 160 $ 760

Account payable to Stu 20 b 20
Dividends payable 80 20 c 14 86
Long-term debt 1,200 200 1,400
Capital stock 2,000 1,000 a 1,000 2,000
Retained earnings 1,156 720 a 720 1,156
Noncontrolling interest
($2,060,000  30%) a 618 618
Equities $5,056 $2,100 $6,020
2011
Preliminary computations (in thousands)
80% Investment in Sam at cost January 1, 2011 $1520
Implied total fair value of Sam ($1,520 / 80%) $1900
Sam book value 1800
Excess fair value over book value recorded as goodwill $100

80% of
Sam Sam net
net
dividends income
income
2011 $80 $160 $128
2012 100 200 160
2013 120 240 192
$300 $600 $480

1. Sams divindends for 2012 ( $80 / 80% ) $100

2. Sams net income for 2012 ( $160 / 80% ) $200
3. Goodwill - Dec 31, 2013 $100
4. Noncontrolling interest share of income 2013
Sam’s income for 2013
($96 dividends received/80%) X 2 $240
Noncontrolling interest percentage 20%
Noncontrolling interest share $48
5. Noncontrolling interest December 31, 2013
Equity of Sam January 1, 2011 $1800
Add: Income for 2011, 2012 and 2013 600
Deduct: Dividends for 2011, 2012 and 2013 -300
Equity book value of Sam December 31, 2013 2100
Goodwill 100
Equity fair value of Sam December 31, 2013 $2200
Noncontrolling interest percentage 20%
Noncontrolling interest December 31, 2013 $440
6. Controlling share of consolidated net income for 2013
Pen’s separate income $560
Add: Income from Sam 192
Controlling share of consolidated net income $752

Pen’s net income $560

Sam’s net income 240
Consolidated net income $800
Less: Noncontrolling interest share ($240 x 20% ) 48
Controlling interest share $752