Ownership percentage :

Aquired by Pep 13,500

Syn's Stockholder equity 15,000
90%

Investment cost 202,500

Implied fair value of Syn 225,000
Book value of Syn 165,000
Excess fair value over book value 60,000

Excess allocated to :
Land 20,000
Patents 40,000
Excess fair value over book value 60,000

Income from Syn :

Syn's reported net income 24,000
Less : Patent amortization - 4,000
Syn's adjusted income 20,000

Pen's share of Syn's income (90%) 18,000

Noncontrolling interest rate (10%) 2,000

Investment in Syn December 31, 2012

Cost January 1, 2011 202,500
Pen's share of the change in Syn's retained earnings 24,300
Less : Patent amortization for 2 years - 7,200
Investment in Syn December 31 219,600

Journal
Income 18,000
Dividends 14,400
Investment 3,600

Noncontrolling interest share 2,000

Dividend 1,600
Noncontrolling interest 400

Capital Stock 150,000

Retained earnings 34,000
Patents 36,000
Land 20,000
Investment 216,000
 Noncontrolling interest 24,000

Amortization Expense 4,000

Patents 4,000
 Pen Corporation and Subsidiary
Consolidation Workpapers
For the year ended December 31, 2012
Pen Syn (90%)

Income Statement
Sales 400,000 100,000
Income from Syn 18,000
Cost of sales - 250,000 - 50,000
Other expenses - 100,600 - 26,000
Consolidated Noncontrolling Interest
Noncontrolling share
Controlling share of NI 67,400 24,000

Retained Earnings
Retained earnings - Pen 177,000
Retained earnings - Syn 34,000
Net income 67,400 24,000
Dividends - 50,000 - 16,000

Retained earnigns - Dec 31 194,400 42,000

Balance Sheet
Cash 18,000 15,000
Accounts receivable 80,000 20,000
Dividends receivable 7,200
Inventories 95,000 10,000
Note receivable - Pen 5,000
Investment in Syn 219,600

Land 65,000 30,000

Buildings - net 170,000 80,000
Equipment - net 130,000 50,000
Patents
784,800 210,000
Accounts payable 85,400 10,000
Note payable to Syn 5,000
Dividends payable 8,000
Capital Stock 500,000 150,000
Retained earnings 194,400 42,000
784,800 210,000
Noncontroling interest January 1
Noncontrolling Interest December 31
n and Subsidiary
Workpapers
December 31, 2012
Adjustments and Eliminations Conosolidated
Statements

500,000
18,000 -
- 300,000
- 4,000 - 130,600
69,400
- 2,000 - 2,000
67,400

177,000
34,000 -
67,400
- 14,400
- 1,600 - 50,000
194,400

33,000
5,000 95,000
7,200 -
105,000
5,000 -
3,600
216,000 -
20,000 115,000
250,000
180,000
36,000 4,000 32,000
810,000
5,000 90,400
5,000 -
7,200 800
150,000 500,000
194,400

24,000
400 24,400
810,000