Prob 4-2 Patter Corp.

1. Goodwill on the Conso. Balance Sheet

CT 1,620,000.00
NCI 330,000.00
PHI
Total 1,950,000.00
L: FVNA (1,650,000.00)
L: Impairment (if any) -2020&2021 (50,000.00)
Goodwill 12/31/22 250,000.00

2. Conso. NI attributable to parent and NCI

2022 Parent Subs. Downstream

Reported NI 1,000,000.00 500,000.00 SP of Interco. Sale
NI Adjustments: % of profit
A: Realized Profit in the Beg. Inv. 3,200.00 total %
L: Unrealized Profit in End. Inv. (6,000.00) Unrealized Profit in End. Inv.
Dividend Revenue (64,000.00)
Underval. Equip. (12,500.00)
Adjusted NI 933,200.00 487,500.00 SP of Interco. Sale
Share of parent 390,000.00 (390,000.00) % of profit
Imp. Of Goodwill (2020) (30,000.00) - total %
Consolidated NI 1,293,200.00 97,500.00 Realized Profit in the Beg. Inv.
NIATP NCINIS
Consolidated NI 1,390,700.00

Prob 4-11 P Company Fixed Assets

1. Consolidated Net Income

Parent Subs. Downstream
Reported NI 300,000.00 200,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. 14,000.00 - Profit from Interco. Sale
L: Unrealized Profit in End. Inv. (70,000.00) M: Unsold portion of Inv. @yr. beg
L: Dividend Revenue (40,000.00) - Unrealized profit in End. Inv.
Underval. Equip. - -
Adjusted NI 204,000.00 200,000.00
Share of parent 160,000.00 (160,000.00)
Imp. Of Goodwill - -
Consolidated NI 364,000.00 40,000.00 404,000.00

2. Balance of NCI Cost of Equip

 Useful Life
NCI, beg. 220,000.00 Dep. Per Yr.
NCINIS 40,000.00 Accum. Dep
Dividends - NCI (10,000.00) Yrs. Used
NCINAS 12/31/22 250,000.00
CT
OS 500,000.00 NCI
Par Val. 100.00 PHI
OS 5,000.00 Total
Acquired by Parent 4,000.00 L: FVNA
CI 0.80 L: Impairment (if any)
Goodwill

Prob 4-14 P Company Fixed Assets

1. Consolidated RE
Parent Subs. Upstream - FA
Reported NI 1,450,000.00 800,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. 10,000.00 Profit from Interco. Sale
L: Unrealized Profit in End. Inv. (25,000.00) (220,000.00) M: Unsold portion of Inv. @yr. beg
L: Dividend Revenue (122,500.00) Unrealized profit in End. Inv.
Underval. Inv. (150,000.00)
Underval. Equip. - (120,000.00) Downstream - Inv.
Adjusted NI 1,302,500.00 320,000.00 Cost of Interco. Sale
Share of parent 256,000.00 (256,000.00)
Imp. Of Goodwill (157,500.00) (67,500.00) Profit from Interco. Sale
Consolidated NI 1,401,000.00 (3,500.00) M: Unsold portion of Inv. @yr. beg
NIATP NCINIS GRP
Unrealized profit in End. Inv.
RE beg. - Parent/Acquirer 5,450,000.00
Gain/Exps. - Upstream - Inv.
NIATP 1,401,000.00 SP of Interco. Sale
L: Divs. Dec. - Parent (400,000.00) Mark up
Conso. RE 6,451,000.00 Profit from Interco. Sale
M: Unsold portion of Inv. @yr. beg
2. NCINAS Unrealized profit in End. Inv.

NCI, beg. 1,675,000.00 OS

NCINIS (3,500.00) Accum. Profits
Dividends - NCI (52,500.00) Inc - Inv.
NCINAS 1,619,000.00 Inc. FA
FVNA - subs.
3. Consolidated GP
Sales by parent co. 1,450,000.00 70% CT
Sales by subsidiary co. 800,000.00 NCI
L: Intercompany sales (600,000.00) FVNA - Subs
Consolidated Sales 1,650,000.00 GW (Full/Partial)
Parent
Cost of Sales Parent 0.60 NCI
Cost of Sales Subsidiary 120,001.25
L: Intercompany Sales (600,000.00)
A: Unrealized profit in End. Inv. -
L: Realized profit in Beg. Inv. (2,800,000.00)
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales (3,279,998.15) ????????????

Consolidated Sales 1,650,000.00

Consolidated Cost of Sales 3,279,998.15
Consolidated Gross Profit 4,929,998.15 ???????????????

MCQs 25-28

25. Dep. Exp.

26. C
27. A
28. A

Prob 4-14
 CY
36,000.00
20%
120%
6,000.00

PY
19,200.00
20%
120%
3,200.00

CY
120,000.00
50,000.00
70,000.00
100%
70,000.00

100,000.00
 10.00
10,000.00
50,000.00
5.00

1,200,000.00
220,000.00
-
1,420,000.00
1,100,000.00
-
320,000.00

CY
200,000.00
120,000.00
80,000.00
100%
80,000.00

CY
150,000.00 100%
60% 60%
250,000.00 40%
25%
40%
25,000.00

CY 120%
250,000.00 100%
125% 20%
200,000.00 ********
70%
140,000.00

1,450,000.00
2,800,000.00
150,000.00
600,000.00
5,000,000.00
GW @Prop.
GW @FV 4,200,000.00
 4,200,000.00 1,500,000.00
1,675,000.00 (5,000,000.00)
(5,000,000.00) 700,000.00
875,000.00 0.80
0.20
Prob 4-1 Emmanuel Corp.

1. Working Paper Elimination Entries on Dec. 31, 2020

2. Consolidated Sales

Sales by parent co. 900,000.00

Sales by subsidiary co. 500,000.00
L: Intercompany sales (50,000.00)
Consolidated Sales 1,350,000.00

3. Consolidated Cost of Sales

Cost of Sales Parent 490,000.00 SP of Interco. Sale

Cost of Sales Subsidiary 190,000.00 Cost of Interco. Sale
L: Intercompany Sales (50,000.00) Profit from Interco. Sale
A: Unrealized profit in End. Inv. 10,000.00 M: Unsold portion of Inv. @yr. end
L: Realized profit in Beg. Inv. - Unrealized profit in End. Inv.
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales 640,000.00

Prob 4-2 Patter Corp.

1. Goodwill on the Conso. Balance Sheet

CT 1,620,000.00
NCI 330,000.00
PHI
Total 1,950,000.00
L: FVNA (1,650,000.00)
L: Impairment (if any) -2020&2021 (62,500.00)
Goodwill 237,500.00

2. Conso. NI attributable to parent and NCI

Parent Subs. Downstream
Reported NI 1,000,000.00 500,000.00 SP of Interco. Sale
NI Adjustments: % of profit
A: Realized Profit in the Beg. Inv. 3,200.00 total %
L: Unrealized Profit in End. Inv. (6,000.00) Unrealized Profit in End. Inv.
Dividend Revenue (64,000.00)
Underval. Equip. (12,500.00)
Adjusted NI 933,200.00 487,500.00 SP of Interco. Sale
Share of parent 390,000.00 (390,000.00) % of profit
Imp. Of Goodwill (2020) (37,500.00) - total %
Consolidated NI 1,285,700.00 97,500.00 Realized Profit in the Beg. Inv.
NIATP NCINIS

Prob 4-3 A & B Co.

1. Conso. NI attributable to parent and NCI

Parent Subs. Upstream
Reported NI 376,250.00 109,375.00 SP of Interco. Sale
NI Adjustments: % of profit
A: Realized Profit in the Beg. Inv. 3,500.00 Markup
L: Unrealized Profit in End. Inv. (6,300.00) Unrealized Profit in End. Inv.
L: Dividend Revenue (52,500.00)
Underval. Equip. -
Adjusted NI 323,750.00 106,575.00 SP of Interco. Sale
Share of parent 63,945.00 (63,945.00) % of profit
Imp. Of Goodwill - - Markup
Consolidated NI 387,695.00 42,630.00 Realized Profit in the Beg. Inv.
NIATP NCINIS

2. Conso. Gross Profit

Sales by parent co. 1,093,750.00

Sales by subsidiary co. 437,500.00
L: Intercompany sales (210,000.00)
Consolidated Sales 1,321,250.00

Cost of Sales Parent 656,250.00

Cost of Sales Subsidiary 262,500.00
L: Intercompany Sales (210,000.00)
A: Unrealized profit in End. Inv. 6,300.00
L: Realized profit in Beg. Inv. (3,500.00)
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales 711,550.00

Consolidated Sales 1,321,250.00

Consolidated Cost of Sales (711,550.00)
Consolidated Gross Profit 609,700.00

Prob 4-4 Sanchez Co.

1. Conso. NI attributable to NCI

Parent Subs.
Reported NI 880,000.00 560,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. - - Profit from Interco. Sale
L: Unrealized Profit in End. Inv. - (14,250.00) M: Unsold portion of Inv. @yr. end
L: Dividend Revenue - Unrealized profit in End. Inv.
Underval. Equip. -
Adjusted NI 880,000.00 545,750.00
Share of parent 327,450.00 (327,450.00)
Imp. Of Goodwill - -
Consolidated NI 1,207,450.00 218,300.00
NIATP NCINIS

2. Realized Profit to be allocated to NCI

Realized Profit 14,250.00

Multiply by: NCI 40%
RP allocated to NCI 5,700.00

Prob 4-5 Pet Co.

1. NIATP
2. NCINIS 1 2
Parent Subs. Downstream
Reported NI 360,000.00 155,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. 1,875.00 (2,800.00) Profit from Interco. Sale
L: Unrealized Profit in End. Inv. (45,000.00) 21,000.00 M: Unsold portion of Inv. @yr. end
L: Dividend Revenue (42,000.00) Unrealized profit in End. Inv.
Underval. Equip. -
Adjusted NI 274,875.00 173,200.00 Upstream
Share of parent 138,560.00 (138,560.00) SP of Interco. Sale
Imp. Of Goodwill - - Cost of Interco. Sale
Consolidated NI 413,435.00 34,640.00 Profit from Interco. Sale
NIATP NCINIS M: Unsold portion of Inv. @yr. end
Unrealized profit in End. Inv.
3. NCINAS
NCI, beg. 212,000.00 CV
NCINIS 34,640.00 Rem. Useful Life
Dividends - NCI (10,500.00) Dep. Per yr.
NCINAS 236,140.00 Used portion
Dep.
4. CV of Property and Equipment

BV 105,000.00 300,000.00 240,000.00

Dep (14,000.00) (12,250.00) (10,718.75)
CV 91,000.00 287,750.00 378,750.00

Prob 4-6 P Co.

1. Conso. Cost of Sales

Upstream
Cost of Sales Parent 5,385,714.29 SP of Interco. Sale
Cost of Sales Subsidiary 3,400,000.00 Cost of Interco. Sale
L: Intercompany Sales (1,792,000.00) Profit from Interco. Sale
A: Unrealized profit in End. Inv. 136,400.00 M: Unsold portion of Inv. @yr. end
L: Realized profit in Beg. Inv. - Unrealized profit in End. Inv.
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales 7,130,114.29 Downstream
SP of Interco. Sale
2. NCI at Dec. 31, 2020 Cost of Interco. Sale
1 2 Profit from Interco. Sale
Parent Subs. M: Unsold portion of Inv. @yr. end
Reported NI 6,032,000.00 3,808,000.00 Unrealized profit in End. Inv.
NI Adjustments:
A: Realized Profit in the Beg. Inv. - - CT
L: Unrealized Profit in End. Inv. (102,000.00) (34,400.00) NCI
L: Dividend Revenue PHI
Underval. Equip. - Total
Adjusted NI 5,930,000.00 3,773,600.00 L: FVNA
Share of parent 3,018,880.00 (3,018,880.00) L: Impairment (if any)
Imp. Of Goodwill - - Goodwill
Consolidated NI 8,948,880.00 754,720.00
NIATP NCINIS

NCI, beg. 450,000.00

NCINIS 754,720.00
Dividends - NCI (10,500.00)
NCINAS 1,194,220.00

Prob 4-7 Worship Co.

1. Conso. Sales
Downstream - 2019
Sales by parent co. 4,150,000.00 SP of Interco. Sale
Sales by subsidiary co. 1,880,000.00 Cost of Interco. Sale
L: Intercompany sales (1,870,000.00) Profit from Interco. Sale
Consolidated Sales 4,160,000.00 M: Unsold portion of Inv. @yr. beg
Realized profit in Beg. Inv.
2. Conso. Cost of Sales
Downstream - 2020
Cost of Sales Parent 2,230,000.00 SP of Interco. Sale
Cost of Sales Subsidiary 1,330,000.00 Cost of Interco. Sale
L: Intercompany Sales (1,870,000.00) Profit from Interco. Sale
A: Unrealized profit in End. Inv. 59,000.00 M: Unsold portion of Inv. @yr. beg
L: Realized profit in Beg. Inv. (60,000.00) Unrealized profit in End. Inv.
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales 1,689,000.00 Upstream - 2020
SP of Interco. Sale
3. NIATP Cost of Interco. Sale
4. NCINIS Profit from Interco. Sale
1 2 M: Unsold portion of Inv. @yr. beg
Parent Subs. Unrealized profit in End. Inv.
Reported NI 1,000,000.00 240,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 60,000.00 -
L: Unrealized Profit in End. Inv. (24,000.00) (35,000.00)
L: Dividend Revenue (70,000.00)
Underval. Equip. -
Adjusted NI 966,000.00 205,000.00
Share of parent 143,500.00 (143,500.00)
Imp. Of Goodwill - -
Consolidated NI 1,109,500.00 61,500.00 *******
NIATP NCINIS

Prob 4-8 P Co.

1. Conso. Gross Profit

Sales by parent co. 5,500,000.00 End. Inv. Of S Co. from P Co.

Sales by subsidiary co. 2,500,000.00 mark-up
L: Intercompany sales (1,200,000.00) overall
Consolidated Sales 6,800,000.00 Unrealized profit in End. Inv.

Cost of Sales Parent 3,200,000.00

Cost of Sales Subsidiary 1,600,000.00
L: Intercompany Sales (1,200,000.00)
A: Unrealized profit in End. Inv. 10,000.00
L: Realized profit in Beg. Inv. -
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales 3,610,000.00

Consolidated Sales 6,800,000.00

Consolidated Cost of Sales (3,610,000.00)
Consolidated Gross Profit 3,190,000.00
Prob 4-9 Sure Corp.
**********************************************************
1. NCINIS
Parent Subs. Upstream
Reported NI - 300,000.00 SP of Interco. Sale
NI Adjustments: % of profit
A: Realized Profit in the Beg. Inv. - - Unrealized Profit in End. Inv.
L: Unrealized Profit in End. Inv. (13,333.33) (50,000.00)
L: Dividend Revenue - - Downstream
Underval. Equip. - - SP of Interco. Sale
Adjusted NI (13,333.33) 250,000.00 % of profit
Share of parent 187,500.00 (187,500.00) total %
Imp. Of Goodwill - - Unrealized Profit in End. Inv.
Consolidated NI 174,166.67 62,500.00
NIATP NCINIS

2. Consolidated Inventories

Ending Inv. of Parent 500,000.00

Ending Inv. of Subsidiary 200,000.00
L: Unrealized profit (63,333.33)
Conso. End. Inv. 636,666.67

Prob 4-10 Flash Corp. Fixed Assets

1. Consolidated Net Income

Parent Subs. Upstream
Reported NI 500,000.00 200,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. - 10,000.00 Profit from Interco. Sale
L: Unrealized Profit in End. Inv. - (60,000.00) M: Unsold portion of Inv. @yr. beg
L: Dividend Revenue (35,000.00) - Unrealized profit in End. Inv.
Underval. Equip. - -
Adjusted NI 465,000.00 150,000.00
Share of parent 105,000.00 (105,000.00)
Imp. Of Goodwill - -
Consolidated NI 570,000.00 45,000.00 615,000.00
NIATP NCINIS
Prob 4-11 P Company Fixed Assets

1. Consolidated Net Income

Parent Subs. Downstream
Reported NI 300,000.00 200,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. 14,000.00 - Profit from Interco. Sale
L: Unrealized Profit in End. Inv. (70,000.00) M: Unsold portion of Inv. @yr. beg
L: Dividend Revenue (40,000.00) - Unrealized profit in End. Inv.
Underval. Equip. - -
Adjusted NI 204,000.00 200,000.00
Share of parent 160,000.00 (160,000.00)
Imp. Of Goodwill - -
Consolidated NI 364,000.00 40,000.00 404,000.00
Cost of Equip
2. Balance of NCI Useful Life
Dep. Per Yr.
NCI, beg. 220,000.00 Accum. Dep
NCINIS 40,000.00 Yrs. Used
Dividends - NCI (10,000.00)
NCINAS 250,000.00 CT
NCI
OS 500,000.00 PHI
Par Val. 100.00 Total
OS 5,000.00 L: FVNA
Acquired by Parent 4,000.00 L: Impairment (if any)
CI 0.80 Goodwill

Prob 4-12 Rapids Co. Fixed Assets

1. NIATP
2. NCINIS Downstream
1 2 SP of Interco. Sale
Parent Subs. Cost of Interco. Sale
Reported NI 2,880,000.00 1,240,000.00 Profit from Interco. Sale
NI Adjustments: M: Unsold portion of Inv. @yr. beg
A: Realized Profit in the Beg. Inv. 15,000.00 (22,400.00) Unrealized profit in End. Inv.
L: Unrealized Profit in End. Inv. (360,000.00) 168,000.00
L: Dividend Revenue (336,000.00) Upstream
Underval. Equip. - SP of Interco. Sale
Adjusted NI 2,199,000.00 1,385,600.00 Cost of Interco. Sale
Share of parent 1,108,480.00 (1,108,480.00) Profit from Interco. Sale
Imp. Of Goodwill - - M: Unsold portion of Inv. @yr. beg
Consolidated NI 3,307,480.00 277,120.00 Unrealized profit in End. Inv.
NIATP NCINIS

3. NCINAS

NCI, beg. 1,696,000.00

NCINIS 277,120.00
Dividends - NCI (84,000.00)
NCINAS 1,889,120.00
Prob 4-13 Parco Corp.

1. NIATP
Parent Subs. Upstream
Reported NI 6,000,000.00 2,400,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. Profit from Interco. Sale
L: Unrealized Profit in End. Inv. (1,800,000.00) (150,000.00) M: Unsold portion of Inv. @yr. beg
L: Dividend Revenue (576,000.00) Unrealized profit in End. Inv.
Underval. Equip. - (300,000.00)
Adjusted NI 3,624,000.00 1,950,000.00 Downstream
Share of parent 1,560,000.00 (1,560,000.00) SP of Interco. Sale
Imp. Of Goodwill (240,000.00) - Cost of Interco. Sale
Consolidated NI 4,944,000.00 390,000.00 Profit from Interco. Sale
NIATP NCINIS M: Unsold portion of Inv. @yr. beg
Unrealized profit in End. Inv.
NCI @FV 2,520,000.00
NCI @Prop. 8,640,000.00

Prob 4-14 P Company Fixed Assets

1. Consolidated RE
Parent Subs. Upstream - FA
Reported NI 1,450,000.00 800,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. 20,000.00 Profit from Interco. Sale
L: Unrealized Profit in End. Inv. (25,000.00) (109,166.67) M: Unsold portion of Inv. @yr. beg
L: Dividend Revenue (122,500.00) Unrealized profit in End. Inv.
Underval. Inv. (150,000.00)
Underval. Equip. - (120,000.00) Downstream - Inv.
Adjusted NI 1,302,500.00 440,833.33 SP of Interco. Sale
Share of parent 352,666.67 (352,666.67) Cost of Interco. Sale
Imp. Of Goodwill (157,500.00) (67,500.00) Profit from Interco. Sale
Consolidated NI 1,497,666.67 20,666.67 M: Unsold portion of Inv. @yr. beg
NIATP NCINIS Unrealized profit in End. Inv.

RE beg. - Parent/Acquirer 5,450,000.00 Upstream - Inv.

Gain/Exps. - SP of Interco. Sale
NIATP 1,497,666.67 Cost of Interco. Sale
L: Divs. Dec. - Parent (400,000.00) Profit from Interco. Sale
Conso. RE 6,547,666.67 M: Unsold portion of Inv. @yr. beg
Unrealized profit in End. Inv.
2. NCINAS
NCI, beg. 1,675,000.00
NCINIS 20,666.67
Dividends - NCI (52,500.00)
NCINAS 1,643,166.67

3. Consolidated GP

Sales by parent co. 1,450,000.00

Sales by subsidiary co. 800,000.00
L: Intercompany sales (700,000.00)
Consolidated Sales 1,550,000.00

Cost of Sales Parent 150,000.00

Cost of Sales Subsidiary 328,333.33
L: Intercompany Sales (700,000.00)
A: Unrealized profit in End. Inv. -
L: Realized profit in Beg. Inv. -
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales (221,666.67) ????????????

Consolidated Sales 1,550,000.00

Consolidated Cost of Sales 221,666.67
Consolidated Gross Profit 1,771,666.67 ???????????????

Prob 4-15 Pi Company Fixed Assets

***********************
1. NCINIS
Parent Subs. Upstream - Inv.
Reported NI 200,000.00 80,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. Profit from Interco. Sale
L: Unrealized Profit in End. Inv. (2,500.00) M: Unsold portion of Inv. @yr. beg
L: Dividend Revenue (34,000.00) Unrealized profit in End. Inv.
Underval. Equip. - -
Adjusted NI 166,000.00 77,500.00
Share of parent 62,000.00 (62,000.00)
Imp. Of Goodwill (8,500.00) (1,500.00)
Consolidated NI 219,500.00 14,000.00
NIATP NCINIS
50,000.00
30,000.00
20,000.00
50%
10,000.00

CY
36,000.00
20%
120%
6,000.00

PY
19,200.00
 20%
120%
3,200.00

CY
31,500.00
25%
125%
6,300.00

PY
17,500.00
25%
125%
3,500.00

CY
285,000.00 120%
237,500.00 100%
47,500.00 20%
30%
14,250.00

CY
345,000.00
300,000.00
45,000.00
100%
45,000.00

CY
84,000.00
105,000.00
(21,000.00)
100%
(21,000.00)

105,000.00
5.00
21,000.00
1/3
7,000.00
 CY
602,000.00 140%
430,000.00 100%
172,000.00 40%
20%
34,400.00

CY
1,190,000.00 140%
850,000.00 100%
340,000.00 40%
30%
102,000.00

1,800,000.00
450,000.00
-
2,250,000.00
2,000,000.00
-
4,250,000.00

PY
1,280,000.00
896,000.00
384,000.00
16%
60,000.00

CY
910,000.00
700,000.00
210,000.00
11%
24,000.00

PY
960,000.00
624,000.00
336,000.00
10%
35,000.00

60,000.00
20%
120%
10,000.00
 CY
200,000.00
25%
50,000.00

CY
80,000.00
20%
120%
13,333.33

CY
360,000.00
300,000.00
60,000.00
100%
60,000.00

CY
120,000.00
50,000.00
70,000.00
 100%
70,000.00

100,000.00
10.00
10,000.00
50,000.00
5.00

1,200,000.00
220,000.00
-
1,420,000.00
1,100,000.00
-
320,000.00

CY
2,760,000.00
2,400,000.00
360,000.00
100%
360,000.00

CY
672,000.00
840,000.00
(168,000.00)
100%
(168,000.00)
 CY
-
-
600,000.00
1/4
150,000.00

CY
14,400,000.00 120%
12,000,000.00 100%
2,400,000.00 20%
75%
1,800,000.00

CY
200,000.00
120,000.00
80,000.00
100%
80,000.00

CY
250,000.00 100%
150,000.00 60%
100,000.00 40%
25%
25,000.00

CY
250,000.00 120%
208,333.33 100%
41,666.67 20%
70%
29,166.67
 CY
50,000.00 100%
37,500.00 75%
12,500.00 25%
20%
2,500.00

37,500.00
20%
25%
15%
281.25
Multiple Choice: Theories

1 A 11 A
2 A 12 B*
3 D* 13 C
4 A 14 D
5 B 15 D
6 A 16 A/B
7 A 17 B
8 B 18 B?
9 D 19 A*
10 A* 20 B/D*

Multiple Choice: Problems

1. Denzel Co. C

Upstream - Inv. CY
SP of Interco. Sale 188,000.00 125%
Cost of Interco. Sale 150,400.00 100%
Profit from Interco. Sale 37,600.00 25%
M: Unsold portion of Inv. @yr. 35%
Realized profit in Beg. Inv. 13,160.00

2. PP Corp. ???

Total Sales of PP
Sales 200,000.00 100%
COGS 150,000.00 75%
GP 50,000.00 25%

Conso. Sales 308,000.00

Sales of PP Corp. 200,000.00
Sales of PP Corp. to ST 108,000.00
% of COGS 75%
Cost of Sales 81,000.00

Upstream - Inv. CY
SP of Interco. Sale 108,000.00
Cost of Interco. Sale 81,000.00
Profit from Interco. Sale 27,000.00
M: Unsold portion of Inv. @yr. 35%
Realized profit in Beg. Inv. 9,450.00
3. Par Corp. A/B

Receivableof Subs 70,000.00

CI 60%
Should be Eliminated 42,000.00

4. A Co. ???

Parent Subs. Upstream

Reported NI 75,250.00 21,875.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. - 4,480.00 Profit from Interco. Sale
L: Unrealized Profit in End. Inv. - (2,520.00) M: Unsold portion of Inv. @yr.
L: Dividend Revenue (10,500.00) Unrealized profit in End. Inv.
Underval. Equip. -
Adjusted NI 64,750.00 23,835.00 Upstream
Share of parent 14,301.00 (14,301.00) SP of Interco. Sale
Imp. Of Goodwill - - Cost of Interco. Sale
Consolidated NI 79,051.00 9,534.00 Profit from Interco. Sale
NIATP NCINIS M: Sold portion of Inv. @yr. beg
Realized profit in End. Inv.
5. Justine Co. D

Trade Rec. Parent 1,040,000.00

Trade Rec. Subs. 215,000.00
Inter Co. T/R (70,000.00)
Conso. Trade Receivables 1,185,000.00

6. Lea Co. D*

Upstream CY
SP of Interco. Sale 100,000.00 140%
Cost of Interco. Sale 71,428.57 100%
Profit from Interco. Sale 28,571.43 40%
M: Unsold portion of Inv. @yr. 50%
Unrealized profit in End. Inv. 14,285.71

7. Aaron Corp. C

SP 55,000.00
Cost (25,000.00)
GP 30,000.00

8. Dale Co. B*
Cost 800,000.00
UL 8.00
Dep. Per yr. 100,000.00
Yrs. Used 3.00
Accum. Dep. 300,000.00

Cost 800,000.00
Accum. Dep. (300,000.00)
CV 500,000.00
FV of Equip. (460,000.00)
Decrease in CV 40,000.00
RUL 5.00
Increase in Dep. Exp. 8,000.00

9. SS Corp. ???

Unrealized Profit 12,000.00

RUL 10.00
Dep. Exp. 1,200.00

10. Ezekiel Corp. D The gain on sale should be eliminated

Sales by parent co. 1,000,000.00

Sales by subsidiary co. 460,000.00
L: Intercompany sales (60,000.00)
Consolidated Sales 1,400,000.00

Cost of Sales Parent 500,000.00

Cost of Sales Subsidiary 260,000.00
L: Intercompany Sales (60,000.00)
A: Unrealized profit in End. Inv. 20,000.00
L: Realized profit in Beg. Inv. -
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales 720,000.00

Consolidated Sales 1,400,000.00

Consolidated Cost of Sales (720,000.00)
Consolidated Gross Profit 680,000.00

11. Ezekiel Corp. C

Dep. Exp. by parent co. 100,000.00

Dep. Exp. by subsidiary co. 60,000.00
Interco. Dep. 2,000.00
Consolidated Sales 162,000.00
12. Ezekiel Corp. B

Parent Subs. Downstream

Reported NI 295,000.00 100,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. 2,000.00 - Profit from Interco. Sale
L: Unrealized Profit in End. Inv. (20,000.00) - M: Unsold portion of Inv. @yr.
L: Dividend Revenue (75,000.00) Unrealized profit in End. Inv.
Underval. Equip. -
Adjusted NI 202,000.00 100,000.00
Share of parent 75,000.00 (75,000.00)
Imp. Of Goodwill - -
Consolidated NI 277,000.00 25,000.00
NIATP NCINIS

13. Princess Corp. C

Dep. Exp. 2,000.00

Accum. Dep. 2,000.00

14. Aaron Corp. C

15. Aaron Corp. B

2020 Parent Subs. Downstream

Reported NI 300,000.00 80,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. - - Profit from Interco. Sale
L: Unrealized Profit in End. Inv. (10,000.00) - M: Unsold portion of Inv. @yr.
L: Dividend Revenue - Unrealized profit in End. Inv.
Underval. Equip. -
Adjusted NI 290,000.00 80,000.00
Share of parent 72,000.00 (72,000.00)
Imp. Of Goodwill - -
Consolidated NI 362,000.00 8,000.00 370,000.00
NIATP NCINIS

2021 Parent Subs. Downstream

Reported NI 400,000.00 60,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. - - Profit from Interco. Sale
L: Unrealized Profit in End. Inv. - - M: Unsold portion of Inv. @yr.
L: Dividend Revenue - Unrealized profit in End. Inv.
Underval. Equip. -
Adjusted NI 400,000.00 60,000.00
Share of parent 54,000.00 (54,000.00)
Imp. Of Goodwill - -
Consolidated NI 454,000.00 6,000.00 460,000.00
NIATP NCINIS

16. Aaron Corp. C

17. Aaron Corp. C *************

2020 Parent Subs. Downstream

Reported NI 300,000.00 80,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. - - Profit from Interco. Sale
L: Unrealized Profit in End. Inv. (10,000.00) M: Unsold portion of Inv. @yr.
L: Dividend Revenue - Unrealized profit in End. Inv.
Underval. Equip. -
Adjusted NI 300,000.00 70,000.00
Share of parent 63,000.00 (63,000.00)
Imp. Of Goodwill - -
Consolidated NI 363,000.00 7,000.00 370,000.00
NIATP NCINIS

2021 Parent Subs. Downstream

Reported NI 400,000.00 60,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. - - Profit from Interco. Sale
L: Unrealized Profit in End. Inv. - - M: Unsold portion of Inv. @yr.
L: Dividend Revenue - Unrealized profit in End. Inv.
Underval. Equip. -
Adjusted NI 400,000.00 60,000.00
Share of parent 54,000.00 (54,000.00)
Imp. Of Goodwill - -
Consolidated NI 454,000.00 6,000.00 460,000.00

18. Phantom Corp. C

19. Phantom Corp. C

Parent Subs. Upstream

Reported NI 500,000.00 200,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. - 10,000.00 Profit from Interco. Sale
L: Unrealized Profit in End. Inv. - (60,000.00) M: Unsold portion of Inv. @yr.
L: Dividend Revenue (35,000.00) Unrealized profit in End. Inv.
Underval. Equip. -
Adjusted NI 465,000.00 150,000.00
Share of parent 105,000.00 (105,000.00)
Imp. Of Goodwill - -
Consolidated NI 570,000.00 45,000.00 615,000.00

20. Pet Co. C *************

21. Pet Co.

2020 Parent Subs. Upstream

Reported NI 360,000.00 115,000.00 SP of Interco. Sale
NI Adjustments: Cost of Interco. Sale
A: Realized Profit in the Beg. Inv. 5,625.00 (4,200.00) Profit from Interco. Sale
L: Unrealized Profit in End. Inv. (45,000.00) 21,000.00 M: Unsold portion of Inv. @yr.
L: Dividend Revenue (42,000.00) Unrealized profit in End. Inv.
Underval. Equip. -
Adjusted NI 278,625.00 131,800.00 Downstream
Share of parent 105,440.00 (105,440.00) SP of Interco. Sale
Imp. Of Goodwill - - Cost of Interco. Sale
Consolidated NI 384,065.00 26,360.00 Profit from Interco. Sale
NIATP NCINIS M: Unsold portion of Inv. @yr.
Unrealized profit in End. Inv.

22. Pan Corp. D

Downstream
Cost of Sales Parent 490,000.00 SP of Interco. Sale
Cost of Sales Subsidiary 190,000.00 Cost of Interco. Sale
L: Intercompany Sales (50,000.00) Profit from Interco. Sale
A: Unrealized profit in End. Inv. 10,000.00 M: Unsold portion of Inv. @yr.
L: Realized profit in Beg. Inv. (4,000.00) Unrealized profit in End. Inv.
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales 636,000.00

22. Pan Corp. D

21 D*
22 C
23 C
24 C
25 C/D?
26 B
27 C
28 D
29 B/A*
30 C*
 CY
42,000.00 125%
33,600.00 100%
8,400.00 25%
30%
2,520.00

PY
28,000.00 125%
22,400.00 100%
5,600.00 25%
80%
4,480.00
 CY
60,000.00
40,000.00
20,000.00
100%
20,000.00

CY
30,000.00
20,000.00
10,000.00
100%
10,000.00

CY
30,000.00
20,000.00
10,000.00
100%
-
 CY
30,000.00
20,000.00
10,000.00
100%
10,000.00

CY
30,000.00
20,000.00
10,000.00
100%
-

CY
360,000.00
300,000.00
60,000.00
100%
60,000.00

500,000.00
2/5
200,000.00

CY
84,000.00
105,000.00
(21,000.00)
100%
(21,000.00)

CY
345,000.00
300,000.00
45,000.00
100%
45,000.00

CY
50,000.00
30,000.00
20,000.00
50%
10,000.00
Prob 4-1 Emmanuel Corp.

1. Working Paper Elimination Entries on Dec. 31, 2020

2. Consolidated Sales

Sales by parent co. 900,000.00

Sales by subsidiary co. 500,000.00
L: Intercompany sales (50,000.00)
Consolidated Sales 1,350,000.00

3. Consolidated Cost of Sales

Cost of Sales Parent 490,000.00

Cost of Sales Subsidiary 190,000.00
L: Intercompany Sales (50,000.00)
A: Unrealized profit in End. Inv. 10,000.00
L: Realized profit in Beg. Inv. -
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales 640,000.00

Prob 4-2 Patter Corp.

1. Goodwill on the Conso. Balance Sheet

CT 1,620,000.00
NCI 330,000.00
PHI
Total 1,950,000.00
L: FVNA (1,650,000.00)
L: Impairment (if any) -2020&2021 (50,000.00)
Goodwill 250,000.00

2. Conso. NI attributable to parent and NCI

Parent Subs.
Reported NI 1,000,000.00 500,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 3,200.00
L: Unrealized Profit in End. Inv. (6,000.00)
Dividend Revenue (64,000.00)
Underval. Equip. (12,500.00)
Adjusted NI 933,200.00 487,500.00
Share of parent 390,000.00 (390,000.00)
 Imp. Of Goodwill (2020) (30,000.00)
Consolidated NI 1,293,200.00 97,500.00
Consolidated NI 1,390,700.00

Prob 4-3 A & B Co.

1. Conso. NI attributable to parent and NCI

Parent Subs.
Reported NI 376,250.00 109,375.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 3,500.00
L: Unrealized Profit in End. Inv. (6,300.00)
L: Dividend Revenue (52,500.00)
Underval. Equip. -
Adjusted NI 323,750.00 106,575.00
Share of parent 63,945.00 (63,945.00)
Imp. Of Goodwill - -
Consolidated NI 387,695.00 42,630.00
Consolidated NI 430,325.00

2. Conso. Gross Profit

Sales by parent co. 1,093,750.00

Sales by subsidiary co. 437,500.00
L: Intercompany sales (210,000.00)
Consolidated Sales 1,321,250.00

Cost of Sales Parent 656,250.00

Cost of Sales Subsidiary 262,500.00
L: Intercompany Sales (210,000.00)
A: Unrealized profit in End. Inv. 6,300.00
L: Realized profit in Beg. Inv. (3,500.00)
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales 711,550.00

Consolidated Sales 1,321,250.00

Consolidated Cost of Sales (711,550.00)
Consolidated Gross Profit 609,700.00

Prob 4-4 Sanchez Co.

1. Conso. NI attributable to NCI

Parent Subs.
Reported NI 880,000.00 560,000.00
NI Adjustments:
 A: Realized Profit in the Beg. Inv. 14,250.00
L: Unrealized Profit in End. Inv. -
L: Dividend Revenue (52,500.00)
Underval. Equip. -
Adjusted NI 827,500.00 574,250.00
Share of parent 344,550.00 (344,550.00)
Imp. Of Goodwill - -
Consolidated NI 1,172,050.00 229,700.00
Consolidated NI 1,401,750.00

2. Realized Profit to be allocated to NCI

Realized Profit 14,250.00

Multiply by: NCI 40%
RP allocated to NCI 5,700.00

Prob 4-5 Pet Co.

1. NIATP
2. NCINIS 1 2
Parent Subs.
Reported NI 360,000.00 155,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 1,875.00 (2,800.00)
L: Unrealized Profit in End. Inv. (45,000.00) 21,000.00
L: Dividend Revenue (42,000.00)
Underval. Equip. -
Adjusted NI 274,875.00 173,200.00
Share of parent 138,560.00 (138,560.00)
Imp. Of Goodwill - -
Consolidated NI 413,435.00 34,640.00

3. NCINAS

NCI, beg. 212,000.00

NCINIS 34,640.00
Dividends - NCI (10,500.00)
NCINAS 236,140.00

4. CV of Property and Equipment

Machinery Equipment
BV 105,000.00 300,000.00
Dep (14,000.00) (12,250.00)
CV 91,000.00 287,750.00
Prob 4-6 P Co.

1. Conso. Cost of Sales

Cost of Sales Parent 5,385,714.29

Cost of Sales Subsidiary 3,400,000.00
L: Intercompany Sales (1,792,000.00)
A: Unrealized profit in End. Inv. 136,400.00
L: Realized profit in Beg. Inv. -
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales 7,130,114.29

2. NCI at Dec. 31, 2020

Parent Subs.
Reported NI 6,032,000.00 3,808,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. - 60,000.00
L: Unrealized Profit in End. Inv. (102,000.00) (34,400.00)
L: Dividend Revenue (35,000.00)
Underval. Equip. -
Adjusted NI 5,895,000.00 3,833,600.00
Share of parent 3,066,880.00 (3,066,880.00)
Imp. Of Goodwill - -
Consolidated NI 8,961,880.00 766,720.00

NCI, beg. 450,000.00

NCINIS 766,720.00
Dividends - NCI (8,750.00)
NCINAS 1,207,970.00

Prob 4-7 Worship Co.

1. Conso. Sales

Sales by parent co. 4,150,000.00

Sales by subsidiary co. 1,880,000.00
L: Intercompany sales (3,150,000.00)
Consolidated Sales 2,880,000.00

2. Conso. Cost of Sales

Cost of Sales Parent 2,230,000.00

Cost of Sales Subsidiary 1,330,000.00
L: Intercompany Sales (3,150,000.00)
 A: Unrealized profit in End. Inv. 59,000.00
L: Realized profit in Beg. Inv. (60,000.00)
A: Dep. in FVA on Inv.
Consolidated Cost of Sales 409,000.00

3. NIATP
4. NCINIS
3 4
Parent Subs.
Reported NI 1,000,000.00 240,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 60,000.00 -
L: Unrealized Profit in End. Inv. (24,000.00) (35,000.00)
L: Dividend Revenue (70,000.00)
Underval. Equip. -
Adjusted NI 966,000.00 205,000.00
Share of parent 143,500.00 (143,500.00)
Imp. Of Goodwill - -
Consolidated NI 1,109,500.00 61,500.00
NIATP NCINIS

Prob 4-8 P Co.

1. Conso. Gross Profit

Sales by parent co. 5,500,000.00

Sales by subsidiary co. 2,500,000.00
L: Intercompany sales (1,200,000.00)
Consolidated Sales 6,800,000.00

Cost of Sales Parent 3,200,000.00

Cost of Sales Subsidiary 1,600,000.00
L: Intercompany Sales (1,200,000.00)
A: Unrealized profit in End. Inv. 10,000.00
L: Realized profit in Beg. Inv.
A: Dep. in FVA on Inv.
Consolidated Cost of Sales 3,610,000.00

Consolidated Sales 6,800,000.00

Consolidated Cost of Sales (3,610,000.00)
Consolidated Gross Profit 3,190,000.00

Prob 4-9 Sure Corp.

1. NCINIS
 Parent Subs.
Reported NI - 300,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 13,333.33 30,000.00
L: Unrealized Profit in End. Inv. (10,000.00) (40,000.00)
L: Dividend Revenue - -
Underval. Equip. - -
Adjusted NI 3,333.33 290,000.00
Share of parent 217,500.00 (217,500.00)
Imp. Of Goodwill - -
Consolidated NI 220,833.33 72,500.00
NIATP NCINIS

2. Consolidated Inventories

Ending Inv. of Parent 500,000.00

Ending Inv. of Subsidiary 200,000.00
L: Unrealized profit (50,000.00)
Conso. End. Inv. 650,000.00

Prob 4-10 Flash Corp. Fixed Assets

1. Consolidated Net Income

Parent Subs.
Reported NI 500,000.00 200,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. - 10,000.00
L: Unrealized Profit in End. Inv. - (60,000.00)
L: Dividend Revenue (35,000.00) -
Underval. Equip. - -
Adjusted NI 465,000.00 150,000.00
Share of parent 105,000.00 (105,000.00)
Imp. Of Goodwill - -
Consolidated NI 570,000.00 45,000.00
615,000.00

Prob 4-11 P Company Fixed Assets

1. Consolidated Net Income

Parent Subs.
 Reported NI 300,000.00 200,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 14,000.00 -
L: Unrealized Profit in End. Inv. (70,000.00)
L: Dividend Revenue (40,000.00) -
Underval. Equip. - -
Adjusted NI 204,000.00 200,000.00
Share of parent 160,000.00 (160,000.00)
Imp. Of Goodwill - -
Consolidated NI 364,000.00 40,000.00

2. Balance of NCI

NCI, beg. 220,000.00

NCINIS 40,000.00
Dividends - NCI (10,000.00)
NCINAS 250,000.00

OS 500,000.00
Par Val. 100.00
OS 5,000.00
Acquired by Parent 4,000.00
CI 0.80

Prob 4-12 Rapids Co. Fixed Assets

1. NIATP
2. NCINIS
Parent Subs.
Reported NI 2,880,000.00 1,240,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 15,000.00 (22,400.00)
L: Unrealized Profit in End. Inv. (360,000.00) 168,000.00
L: Dividend Revenue (336,000.00)
Underval. Equip. -
Adjusted NI 2,199,000.00 1,385,600.00
Share of parent 1,108,480.00 (1,108,480.00)
Imp. Of Goodwill - -
Consolidated NI 3,307,480.00 277,120.00

Prob 4-13 Parco Corp.

1. NIATP
 Parent Subs.
Reported NI 6,000,000.00 2,400,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv.
L: Unrealized Profit in End. Inv. (1,800,000.00) (150,000.00)
L: Dividend Revenue (576,000.00)
Underval. Equip. - (300,000.00)
Adjusted NI 3,624,000.00 1,950,000.00
Share of parent 1,560,000.00 (1,560,000.00)
Imp. Of Goodwill (240,000.00) -
Consolidated NI 4,944,000.00 390,000.00
NIATP NCINIS

NCI @FV 2,520,000.00

NCI @Prop. 8,640,000.00

Prob 4-14 P Company

OS 1,450,000.00
Accum. Profits 2,800,000.00
Inc. in Inv. 150,000.00
Inc. in FA 600,000.00
FVNA - Subs. 5,000,000.00

NCI @FV NCI @Prop

CT 70% 4,200,000.00 4,200,000.00
NCI 30% 1,675,000.00 1,500,000.00
FVNA (5,000,000.00) (5,000,000.00)
Full/Partial GW 875,000.00 700,000.00
Parent 0.80
NCI 0.20

Inteco. Sale
1 Proceeds 200,000.00
CV 120,000.00
Unrealized Gain 80,000.00
RUL 4.00
Annual Realized 20,000.00
Prorated 1/2
Realized Gain 10,000.00

2 Cost 150,000.00
Cost Ratio 60%
Total 250,000.00
 Unsold % 25%
GPR 40%
Unrealized Profit - Downstream 25,000.00

3 Total 250,000.00
Mark-up 125%
Unsold % 70%
Unrealized Profit Upstream 35,000.00

Parent Subs.
Reported NI 1,450,000.00 800,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 10,000.00
L: Unrealized Profit in End. Inv. (25,000.00) (35,000.00)
L: Dividend Revenue (122,500.00)
Gain on Sale of Equip. (80,000.00)
Underval. Inv. (150,000.00)
Underval. Equip. - (120,000.00)
Adjusted NI 1,302,500.00 425,000.00
Share of parent 297,500.00 (297,500.00)
Imp. Of Goodwill (180,000.00) (45,000.00)
Consolidated NI 1,420,000.00 82,500.00
NIATP NCINIS

RE beg. - Parent/Acquirer 5,450,000.00

Gain/Exps. -
NIATP 1,420,000.00
L: Divs. Dec. - Parent (400,000.00)
Conso. RE 6,470,000.00

NCI, beg. 1,675,000.00

NCINIS 82,500.00
Dividends - NCI (52,500.00)
NCINAS 1,705,000.00

Sales by parent co. 1,450,000.00

Sales by subsidiary co. 800,000.00
L: Intercompany sales (450,000.00)
Consolidated Sales 1,800,000.00

Cost of Sales Parent 150,000.00

Cost of Sales Subsidiary
L: Intercompany Sales (450,000.00)
A: Unrealized profit in End. Inv.
L: Realized profit in Beg. Inv. -
 A: Dep. in FVA on Inv. -
Consolidated Cost of Sales (300,000.00) ????

Consolidated Sales 1,800,000.00

Consolidated Cost of Sales 300,000.00
Consolidated Gross Profit 2,100,000.00

Prob 4-15 Pi Company Fixed Assets

1. NCINIS
Parent Subs.
Reported NI 200,000.00 80,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv.
L: Unrealized Profit in End. Inv. (2,500.00)
L: Dividend Revenue (34,000.00)
Underval. Equip. - -
Adjusted NI 166,000.00 77,500.00
Share of parent 65,875.00 (65,875.00)
Imp. Of Goodwill (8,500.00) (1,500.00)
Consolidated NI 223,375.00 10,125.00
NIATP NCINIS

Some probs I don't get

Prob 4-14 P Company
Full GW Partial GW
CT 4,200,000.00 4,200,000.00
NCI 1,675,000.00 1,500,000.00
FVNA (5,000,000.00) (5,000,000.00)
GW 875,000.00 700,000.00
Parent - Subs. 0.80 0.20

Upstream - DA
SP 200,000.00
CV 120,000.00
Unrealized gain 80,000.00
RUL 4.00
Dep. 20,000.00
Used 1/2
Realized gain 10,000.00

Downstream Sale
SP of Interco. Sale 250,000.00 100%
Cost of Interco. Sale 150,000.00 60%
Profit from Interco. Sale 100,000.00 40%
M: Unsold portion of Inv. @yr. end 25%
Unrealized profit in End. Inv. 25,000.00

Upstream Sale
SP of Interco. Sale 250,000.00 125%
Cost of Interco. Sale 200,000.00 100%
Profit from Interco. Sale 50,000.00 25%
M: Unsold portion of Inv. @yr. end 70%
Unrealized profit in End. Inv. 35,000.00

Parent Subs.
Reported NI 1,450,000.00 800,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 10,000.00
L: Unrealized Profit in End. Inv. (25,000.00) (115,000.00)
L: Dividend Revenue (122,500.00)
Underval. Inv. (150,000.00)
Underval. Equip. - (120,000.00)
Adjusted NI 1,302,500.00 425,000.00
Share of parent 297,500.00 (297,500.00)
Imp. Of Goodwill (180,000.00) (45,000.00)
Consolidated NI 1,420,000.00 82,500.00
1,502,500.00

NCI, beg. 1,675,000.00

NCINIS 82,500.00
L: Dividends - NCI (52,500.00)
NCINAS 1,705,000.00

Sales by parent co. 1,450,000.00

Sales by subsidiary co. 800,000.00
L: Intercompany sales (700,000.00)
Consolidated Sales 1,550,000.00

Cost of Sales Parent 150,000.00

Cost of Sales Subsidiary 320,000.00
L: Intercompany Sales (700,000.00)
A: Unrealized profit in End. Inv. 140,000.00
L: Realized profit in Beg. Inv. (10,000.00)
A: Dep. in FVA on Inv.
Consolidated Cost of Sales (100,000.00)

Consolidated Sales 1,550,000.00

Consolidated Cost of Sales (100,000.00)
Consolidated Gross Profit 1,450,000.00
SP of Interco. Sale 50,000.00
Cost of Interco. Sale 30,000.00
Profit from Interco. Sale 20,000.00
M: Unsold portion of Inv. @yr. end 50%
Unrealized profit in End. Inv. 10,000.00

Downstream Sale - Beg. 2020

Beg. Inv. 19,200.00
Mark-up 20%
SP % 120%
Realized Profit 3,200.00

Downstream Sale - End. 2020

End. Inv. 36,000.00
Mark-up 20%
SP % 120%
Unrealized Profit 6,000.00

Upstream Sale - Beg. 2020

Beg. Inv. 17,500.00
Mark-up 25%
SP % 125%
Realized Profit 3,500.00

Upstream Sale - End. 2020

End. Inv. 31,500.00
Mark-up 25%
SP % 125%
Unrealized Profit 6,300.00

Upstream Sale - End. 2020

SP of Interco. Sale 285,000.00 120%
Cost of Interco. Sale 237,500.00 100%
Profit from Interco. Sale 47,500.00 20%
M: Unsold portion of Inv. @yr. end 30%
Unrealized profit in End. Inv. 14,250.00

Upstream Sale - End. 2020

SP of Interco. Sale 84,000.00
Cost of Interco. Sale 105,000.00
Profit from Interco. Sale (21,000.00)
M: Unsold portion of Inv. @yr. end 100%
Unrealized profit in End. Inv. (21,000.00)

Downstream Sale - End. 2020

SP of Interco. Sale 345,000.00
Cost of Interco. Sale 300,000.00
Profit from Interco. Sale 45,000.00
M: Unsold portion of Inv. @yr. end 100%
Unrealized profit in End. Inv. 45,000.00

240,000.00
(10,718.75)
378,750.00
Upstream Sale - End. 2020
SP of Interco. Sale 602,000.00 140%
Cost of Interco. Sale 430,000.00 100%
Profit from Interco. Sale 172,000.00 40%
M: Unsold portion of Inv. @yr. end 20%
Unrealized profit in End. Inv. 34,400.00

Downstream Sale - End. 2020

SP of Interco. Sale 1,190,000.00 140%
Cost of Interco. Sale 850,000.00 100%
Profit from Interco. Sale 340,000.00 40%
M: Unsold portion of Inv. @yr. end 30%
Unrealized profit in End. Inv. 102,000.00

CT 1,800,000.00
NCI 450,000.00
PHI -
Total 2,250,000.00
L: FVNA 2,000,000.00
L: Impairment (if any) -
Goodwill 4,250,000.00

Downstream - 2019 PY
SP of Interco. Sale 1,280,000.00
Cost of Interco. Sale 896,000.00
Profit from Interco. Sale 384,000.00
M: Unsold portion of Inv. @yr. beg 16%
Realized profit in Beg. Inv. 60,000.00

Downstream - 2020 CY
SP of Interco. Sale 910,000.00
Cost of Interco. Sale 700,000.00
Profit from Interco. Sale 210,000.00
M: Unsold portion of Inv. @yr. beg 11%
Unrealized profit in End. Inv. 24,000.00

Upstream - 2020 PY
SP of Interco. Sale 960,000.00
Cost of Interco. Sale 624,000.00
Profit from Interco. Sale 336,000.00
M: Unsold portion of Inv. @yr. beg 10%
Unrealized profit in End. Inv. 35,000.00

Downstream Sale - End. 2020

End. Inv. 60,000.00
Mark-up 20%
SP % 120%
Unrealized Profit 10,000.00
Upstream - beg. CY
SP of Interco. Sale 150,000.00
% of profit 25%
total % 125%
Realized Profit in End. Inv. 30,000.00

Upstream - end. CY
SP of Interco. Sale 200,000.00
% of profit 25%
total % 125%
Unrealized Profit in End. Inv. 40,000.00

Downstream - beg. CY
SP of Interco. Sale 80,000.00
% of profit 20%
total % 120%
Realized Profit in End. Inv. 13,333.33

Downstream - end. CY
SP of Interco. Sale 60,000.00
% of profit 20%
total % 120%
Unrealized Profit in End. Inv. 10,000.00

Upstream CY
SP of Interco. Sale 360,000.00
Cost of Interco. Sale 300,000.00
Profit from Interco. Sale 60,000.00
M: Unsold portion of Inv. @yr. beg 100%
Unrealized profit in End. Inv. 60,000.00

Downstream CY
SP of Interco. Sale 120,000.00
Cost of Interco. Sale 50,000.00
Profit from Interco. Sale 70,000.00
M: Unsold portion of Inv. @yr. beg 100%
Unrealized profit in End. Inv. 70,000.00

404,000.00
Cost of Equip 100,000.00
Useful Life 10.00
Dep. Per Yr. 10,000.00
Accum. Dep 50,000.00
Yrs. Used 5.00

CT 1,200,000.00
NCI 220,000.00
PHI -
Total 1,420,000.00
L: FVNA 1,100,000.00
L: Impairment (if any) -
Goodwill 320,000.00

Upstream CY
SP of Interco. Sale 672,000.00
Cost of Interco. Sale 840,000.00
Profit from Interco. Sale (168,000.00)
M: Unsold portion of Inv. @yr. beg 100%
Unrealized profit in End. Inv. (168,000.00)

Downstream CY
SP of Interco. Sale 2,760,000.00
Cost of Interco. Sale 2,400,000.00
Profit from Interco. Sale 360,000.00
M: Unsold portion of Inv. @yr. beg 100%
Unrealized profit in End. Inv. 360,000.00
Upstream CY
SP of Interco. Sale -
Cost of Interco. Sale -
Profit from Interco. Sale 600,000.00
M: Unsold portion of Inv. @yr. beg 1/4
Unrealized profit in End. Inv. 150,000.00

Downstream CY
SP of Interco. Sale 14,400,000.00 120%
Cost of Interco. Sale 12,000,000.00 100%
Profit from Interco. Sale 2,400,000.00 20%
M: Unsold portion of Inv. @yr. beg 75%
Unrealized profit in End. Inv. 1,800,000.00
Upstream - Inv. CY
SP of Interco. Sale 50,000.00 100%
Cost of Interco. Sale 37,500.00 75%
Profit from Interco. Sale 12,500.00 25%
M: Unsold portion of Inv. @yr. beg 20%
Unrealized profit in End. Inv. 2,500.00
MCQs: Theories

1 A 11 A 21 C
2 A 12 B* 22 C
3 D* 13 A 23 C
4 A 14 B 24 C
5 A/B 15 D 25 C/D
6 A 16 A/B 26 B
7 A* 17 B 27 C
8 B 18 B? 28 D
9 B 19 D 29 B/A*
10 A* 20 B/D 30 C*

MCQs: Problems

1 Denzel Co. A

Upstream - Inv. CY
SP of Interco. Sale 188,000.00 125%
Cost of Interco. Sale 150,400.00 100%
Profit from Interco. Sale 37,600.00 25%
M: Sold portion of Inv. @yr. beg 65%
Realized Profit 24,440.00
NCI 30%
To be allocated to NCI 7,332.00

2 PP Corp. D?
PP Corp.
COGS 150,000.00
Sales 200,000.00
Mark-up on costs 0.75

Conso. Sales 308,000.00

Sales of PP corp. (200,000.00)
Sales of ST Co. (140,000.00)
Interco. Sales (32,000.00)
Sales % 125%
Total (25,600.00)
Mark-up % 25%
OG cost (6,400.00)

Conso. COS 231,000.00

COS of PP corp. (150,000.00)
COS of ST Co. (110,000.00)
 Interco. COS (29,000.00)

3 Par Corp. B

Advance 70,000.00
CI 60%
Eliminated 42,000.00

4 A Co. B*
Parent Subs.
Reported NI 75,250.00 21,875.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 700.00
L: Unrealized Profit in End. Inv. (1,260.00)
L: Dividend Revenue (10,500.00)
Underval. Equip. - -
Adjusted NI 64,750.00 21,315.00
Share of parent 12,789.00 (12,789.00)
Imp. Of Goodwill - -
Consolidated NI 77,539.00 8,526.00

Upstream - Inv. - 2019

Inventory from B corp. 3,500.00
Mark-up % 25%
Sales % 125%
Realized Profit 700.00

Upstream - Inv. - 2020

Inventory from B corp. 6,300.00
Mark-up % 25%
Sales % 125%
Unrealized Profit 1,260.00

5 Justine Co. D

Parent's Receivables 1,040,000.00

Subs.' Receivables 215,000.00
Interco. Receivables (70,000.00)
Conso. Trade Receivables 1,185,000.00

6 Lea Co. D

Upstream - Inv. CY
SP of Interco. Sale 100,000.00 100%
Cost of Interco. Sale 70,000.00 70%
 Profit from Interco. Sale 30,000.00 30%
M: Unsold portion of Inv. @yr. beg 50%
Unrealized profit in End. Inv. 15,000.00

7 Aaron Corp. C

Sp to third party 55,000.00

Sp to Parent 25,000.00
Gain on Sale of Land 30,000.00

8 Dale Co. B

Cost 800,000.00
UL 8.00
Dep. Per yr. 100,000.00
Yrs. Used 3.00
Accum. Dep. 300,000.00

Cost 800,000.00
Accum. Dep. (300,000.00)
CV 500,000.00
FV of Equip. (460,000.00)
Decrease in CV 40,000.00
RUL 5.00
Increase in Dep. Exp. 8,000.00

9 SS Corp. A

SP 100,000.00
EUL 10.00
Dep. Exp. 10,000.00

10 Ezekiel Corp. D

It should be eliminated because it is an interco. Sale

11 Ezekiel Corp. D

Depreciation Exp. Parent 100,000.00

Depreciation Exp. Subs. 60,000.00
Interco. Dep. Exp. (2,000.00)
Conso. Dep. Exp. 158,000.00

12 Ezekiel Corp. B
Parent Subs.
 Reported NI 295,000.00 100,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 2,000.00
L: Unrealized Profit in End. Inv. (20,000.00)
L: Dividend Revenue (75,000.00)
Underval. Equip. - -
Adjusted NI 202,000.00 100,000.00
Share of parent 75,000.00 (75,000.00)
Imp. Of Goodwill - -
Consolidated NI 277,000.00 25,000.00

Upstream - FA - 2020
SP 60,000.00
CV 40,000.00
Unrealized Gain 20,000.00

13 Princess Corp. B

14 Aeron Corp. C
2020 Parent Subs.
Reported NI 300,000.00 80,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv.
L: Unrealized Profit in End. Inv. (10,000.00)
L: Dividend Revenue
Underval. Equip. - -
Adjusted NI 290,000.00 80,000.00
Share of parent 72,000.00 (72,000.00)
Imp. Of Goodwill - -
Consolidated NI 362,000.00 8,000.00

Downstream - FA - 2020
SP 30,000.00
CV 20,000.00
Unrealized Gain 10,000.00

2021 Parent Subs.

Reported NI 400,000.00 60,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv.
L: Unrealized Profit in End. Inv. -
L: Dividend Revenue
Underval. Equip. - -
Adjusted NI 400,000.00 60,000.00
Share of parent 54,000.00 (54,000.00)
 Imp. Of Goodwill - -
Consolidated NI 454,000.00 6,000.00

15 Aeron Corp. B
2020
NIATP 362,000.00
NCINIS 8,000.00
Conso NI 370,000.00

2021
NIATP 454,000.00
NCINIS 6,000.00
Conso NI 460,000.00

16 Aeron Corp. A*

Same computation w/ no. 15 (2021)

17 Aeron Corp. B

2020 Parent Subs.

Reported NI 300,000.00 80,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv.
L: Unrealized Profit in End. Inv. (10,000.00)
L: Dividend Revenue
Underval. Equip. - -
Adjusted NI 300,000.00 70,000.00
Share of parent 63,000.00 (63,000.00)
Imp. Of Goodwill - -
Consolidated NI 363,000.00 7,000.00

Upstream - FA - 2020
SP 30,000.00
CV 20,000.00
Unrealized Gain 10,000.00

2021 Parent Subs.

Reported NI 400,000.00 60,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv.
L: Unrealized Profit in End. Inv. -
L: Dividend Revenue
Underval. Equip. - -
Adjusted NI 400,000.00 60,000.00
 Share of parent 54,000.00 (54,000.00)
Imp. Of Goodwill - -
Consolidated NI 454,000.00 6,000.00

18 Phantom Corp. C
19 Phantom Corp. C

Parent Subs.
Reported NI 500,000.00 200,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 10,000.00
L: Unrealized Profit in End. Inv. - (60,000.00)
L: Dividend Revenue (35,000.00)
Underval. Equip. - -
Adjusted NI 465,000.00 150,000.00
Share of parent 105,000.00 (105,000.00)
Imp. Of Goodwill - -
Consolidated NI 570,000.00 45,000.00
615,000.00
Uptream - FA - 2020
SP 360,000.00
CV 300,000.00
Unrealized Gain 60,000.00

20 Pet Co. A
Parent Subs.
Reported NI 360,000.00 155,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 1,875.00 (2,800.00)
L: Unrealized Profit in End. Inv. (45,000.00) 21,000.00
L: Dividend Revenue (42,000.00)
Underval. Equip. -
Adjusted NI 274,875.00 173,200.00
Share of parent 138,560.00 (138,560.00)
Imp. Of Goodwill - -
Consolidated NI 413,435.00 34,640.00

Upstream Sale - End. 2020

SP of Interco. Sale 84,000.00
Cost of Interco. Sale 105,000.00
Profit from Interco. Sale (21,000.00)
M: Unsold portion of Inv. @yr. end 100%
Unrealized profit in End. Inv. (21,000.00)

Downstream Sale - End. 2020

 SP of Interco. Sale 345,000.00
Cost of Interco. Sale 300,000.00
Profit from Interco. Sale 45,000.00
M: Unsold portion of Inv. @yr. end 100%
Unrealized profit in End. Inv. 45,000.00

21 Pet Co. C

NCI, beg. 212,000.00

NCINIS 34,640.00
Dividends - NCI (10,500.00)
NCINAS 236,140.00

Machinery Equipment
BV 105,000.00 300,000.00 240,000.00
Dep (14,000.00) (12,250.00) (10,718.75)
CV 91,000.00 287,750.00 378,750.00

22 Pan Corp. D

Cost of Sales Parent 490,000.00

Cost of Sales Subsidiary 190,000.00
L: Intercompany Sales (50,000.00)
A: Unrealized profit in End. Inv. 10,000.00
L: Realized profit in Beg. Inv. (4,000.00)
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales 636,000.00

Downstream Sale - End. 2020

SP of Interco. Sale 50,000.00
Cost of Interco. Sale 30,000.00
Profit from Interco. Sale 20,000.00
M: Unsold portion of Inv. @yr. end 50%
Unrealized profit in End. Inv. 10,000.00

23 Marie Co. D
Parent Subs.
Reported NI 430,000.00 280,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 37,600.00
L: Unrealized Profit in End. Inv. (15,000.00)
L: Dividend Revenue -
Underval. Equip. -
Adjusted NI 452,600.00 280,000.00
Share of parent 210,000.00 (210,000.00)
 Imp. Of Goodwill - -
Consolidated NI 662,600.00 70,000.00

Downstream Sale - End. 2020

SP of Interco. Sale 250,666.67 100%
Cost of Interco. Sale 188,000.00 75%
Profit from Interco. Sale 62,666.67 25%
M: Unsold portion of Inv. @yr. end 60%
Unrealized profit in End. Inv. 37,600.00

24 Solomon Co. C

25 James Co. A

Cash/proceeds 39,000.00
Gain on Sale 15,000.00
CV 24,000.00

Gain on Sale 15,000.00

RUL 3.00
Realized Gain 5,000.00

26 James Co. C

27 James Co. A
28 James Co. A
27
Parent Subs.
Reported NI 85,000.00 45,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 120,000.00 5,000.00
L: Unrealized Profit in End. Inv. (75,000.00) (15,000.00)
L: Dividend Revenue -
Underval. Equip. -
Adjusted NI 130,000.00 35,000.00
Share of parent 21,000.00 (21,000.00)
Imp. Of Goodwill - -
Consolidated NI 151,000.00 14,000.00
Consolidated NI 165,000.00

29 Lion Co. D

Sales by parent co. 140,000.00

Sales by subsidiary co. 120,000.00
L: Intercompany sales (120,000.00)
 Consolidated Sales 140,000.00

30 Lion Co. D*

Cost of Sales Parent 120,000.00

Cost of Sales Subsidiary 75,000.00
L: Intercompany Sales (120,000.00)
A: Unrealized profit in End. Inv. 9,000.00
L: Realized profit in Beg. Inv. -
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales 84,000.00 ***

Upstream Sale - End. 2020

SP of Interco. Sale 120,000.00
Cost of Interco. Sale 75,000.00
Profit from Interco. Sale 45,000.00
M: Unsold portion of Inv. @yr. end 20%
Unrealized profit in End. Inv. 9,000.00

31 Lion Co. B

Consolidated Sales 140,000.00

Consolidated Cost of Sales 96,000.00
Consolidated Gross Profit 44,000.00
CI 70%
CI in Conso GP 30,800.00

32 Lion Co. D

Ending Inv. of Parent 24,000.00

Ending Inv. of Subsidiary -
L: Unrealized profit (9,000.00)
Conso. End. Inv. 15,000.00

33 Sure Corp. A
Parent Subs.
Reported NI - 300,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. 16,000.00
L: Unrealized Profit in End. Inv. (12,000.00)
L: Dividend Revenue -
Underval. Equip. -
Adjusted NI - 304,000.00
Share of parent 228,000.00 (228,000.00)
Imp. Of Goodwill - -
 Consolidated NI 228,000.00 76,000.00

Upstream Sale - Beg. 2020

SP of Interco. Sale 80,000.00
% of profit 25%
total % 125%
Realized Profit in End. Inv. 16,000.00

Upstream Sale - Beg. 2020

SP of Interco. Sale 60,000.00
% of profit 25%
total % 125%
Unrealized Profit in End. Inv. 12,000.00

34 Sure Corp. D

Ending Inv. of Parent 500,000.00

Ending Inv. of Subsidiary 200,000.00
L: Unrealized profit (45,333.33)
Conso. End. Inv. 654,666.67

Downstream Sale - Beg. 2020

SP of Interco. Sale 150,000.00
% of profit 20%
total % 120%
Realized Profit in End. Inv. 25,000.00

Downstream Sale - End. 2020

SP of Interco. Sale 200,000.00
% of profit 20%
total % 120%
Unrealized Profit in End. Inv. 33,333.33

35 P Company D

Cost of Sales Parent 3,200,000.00

Cost of Sales Subsidiary 1,600,000.00
L: Intercompany Sales (1,000,000.00)
A: Unrealized profit in End. Inv. 10,000.00
L: Realized profit in Beg. Inv. -
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales 3,810,000.00

Downstream Sale - End. 2020

SP of Interco. Sale 1,000,000.00 125%
 Cost of Interco. Sale 800,000.00 100%
Profit from Interco. Sale 200,000.00 25%
M: Unsold portion of Inv. @yr. end 5%
Unrealized profit in End. Inv. 10,000.00

36 P Company A
Parent Subs.
Reported NI 1,650,000.00 600,000.00
NI Adjustments:
A: Realized Profit in the Beg. Inv. -
L: Unrealized Profit in End. Inv. (10,000.00) -
L: Dividend Revenue -
Underval. Equip. -
Adjusted NI 1,640,000.00 600,000.00
Share of parent 480,000.00 (480,000.00)
Imp. Of Goodwill (16,000.00) (4,000.00)
Consolidated NI 2,104,000.00 116,000.00
Comprehensive Problem
Gryffindor Company

1. Consolidated Sales Original Cost

UL
Sales by parent co. 3,000,000.00 Dep. per Yr.
Sales by subsidiary co. 1,500,000.00 Yrs. Used
L: Intercompany sales (700,000.00) Accum. Dep.
Consolidated Sales 3,800,000.00
Original Cost
2. Consolidated Cost of Sales Accum. Dep.
Carrying Value
Cost of Sales Parent 1,500,000.00
Cost of Sales Subsidiary 900,000.00 Upstream - DA
L: Intercompany Sales (700,000.00) SP of Interco. Sale
A: Unrealized profit in End. Inv. 20,000.00 Cost of Interco. Sale
L: Realized profit in Beg. Inv. (3,000.00) Unrealized Profit from Interco
A: Dep. in FVA on Inv. -
Consolidated Cost of Sales 1,717,000.00 Unrealized Profit
RUL
3. Consolidated Gross Profit Realized Profit

Consolidated Sales 3,800,000.00 Downstream - DA

Consolidated Cost of Sales 1,717,000.00 SP of Interco. Sale
Consolidated Gross Profit 2,083,000.00 Cost of Interco. Sale
Unrealized Profit from Interco
4. Consolidated Net Income Attributable to Parent
5. Consolidated Net Income Attributable to NCI Unrealized Profit
4 5 RUL
Parent Subs. Realized Profit
Reported NI 550,000.00 90,000.00
NI Adjustments: Downstream - Inv.
A: Realized Profit in the Beg. Inv. 8,000.00 (5,000.00) Total DS Interco. Sale
L: Unrealized Profit in End. Inv. (145,000.00) (21,600.00) From Dep. Assets
Dividend Revenue (24,000.00) From Inventories
Land (assumed overval) 50,000.00 Cost of Interco. Sale
Equipment (assumed underval) (6,000.00) Gain/Loss
Inventory (assumed overval) 40,000.00 M: Unsold portion of Inv. @yr.
Adjusted NI 389,000.00 147,400.00 Unrealized Profit from Interco
Share of parent 117,920.00 (117,920.00)
Imp. Of Goodwill (2020) - -
Consolidated NI 506,920.00 29,480.00 SP of Interco. Sale
Cost of Interco. Sale
6. Consolidated Retained Earnings Profit from Interco. Sale
M: Unsold portion of Inv. @yr.
 RE beg. - Parent/Acquirer 2,175,000.00 Realized Profit
Gain/Exps. -
NIATP 506,920.00 Upstream - Inv.
L: Divs. Dec. - Parent (25,000.00) Total DS Interco. Sale
Conso. RE 2,656,920.00 From Dep. Assets
From Inventories
Cost of Interco. Sale
Gain/Loss
M: Unsold portion of Inv. @yr.
Unrealized Profit from Interco

SP of Interco. Sale
Cost of Interco. Sale
Profit from Interco. Sale
M: Unsold portion of Inv. @yr.
Realized Profit

Gryffindor Company 2nd Try

1. Consolidated Sales Upstream - DA

SP of Interco. Sale
Sales by parent co. 3,000,000.00 Cost of Interco. Sale
Sales by subsidiary co. 1,500,000.00 Unrealized Profit from Interco
L: Intercompany sales (700,000.00)
Consolidated Sales 3,800,000.00 Unrealized Profit
RUL
2. Consolidated Cost of Sales Realized Profit

Cost of Sales Parent 1,500,000.00 Downstream - DA

Cost of Sales Subsidiary 900,000.00 SP of Interco. Sale
L: Intercompany Sales (700,000.00) Cost of Interco. Sale
A: Unrealized profit in End. Inv. 58,333.33 Unrealized Profit from Interco
L: Realized profit in Beg. Inv. (35,500.00)
A: Dep. in FVA on Inv. Unrealized Profit
Consolidated Cost of Sales 1,722,833.33 RUL
Realized Profit
3. Consolidated Gross Profit
*Let's assume that sales to 3rd parties has the same m
Consolidated Sales 3,800,000.00
Consolidated Cost of Sales 1,722,833.33
Consolidated Gross Profit 2,077,166.67 Sales
COS
4. Consolidated Net Income Attributable to Parent Gain/loss
5. Consolidated Net Income Attributable to NCI

Subs. RE, End 320,000.00 Sales

Subs. RE, Beg 260,000.00 COS
Change in Net Assets 60,000.00 Gain/loss
*Reason why I assumed Equip. is underval.
4 5 Downstream - Inv.
Parent Subs. Interco. Inv - END
Reported NI 550,000.00 90,000.00 Mark-up Rate
NI Adjustments: Sales Rate
A: Realized Profit in the Beg. Inv. 30,500.00 5,000.00 Unrealized Profit
L: Unrealized Profit in End. Inv. (55,000.00) (3,333.33)
Dividend Revenue (24,000.00) Downstream - Inv.
Land (assumed overval) 50,000.00 Interco. Inv - BEG
Equipment (assumed underval) (6,000.00) Mark-up Rate
Inventory (assumed overval) 40,000.00 Sales Rate
Adjusted NI 501,500.00 175,666.67 Realized Profit
Share of parent 140,533.33 (140,533.33)
Imp. Of Goodwill (2020) - - Upstream - Inv.
Consolidated NI 642,033.33 35,133.33 Interco. Inv - END
Mark-up Rate
6. Consolidated Retained Earnings Sales Rate
Unrealized Profit
RE beg. - Parent/Acquirer 2,175,000.00
Gain/Exps. - Upstream - Inv.
NIATP 642,033.33 Interco. Inv - BEG
L: Divs. Dec. - Parent (25,000.00) Mark-up Rate
Conso. RE 2,792,033.33 Sales Rate
Realized Profit
120,000.00
8.00
15,000.00
4.00
60,000.00

120,000.00
60,000.00
60,000.00

CY
40,000.00
60,000.00
(20,000.00)

(20,000.00)
4.00
(5,000.00)

CY
100,000.00
60,000.00
40,000.00

40,000.00
5.00
8,000.00

CY
400,000.00
100,000.00
300,000.00 100%
150,000.00 50%
150,000.00 50%
70% *how to get the %
105,000.00

PY
300,000.00
150,000.00
150,000.00
30%
 45,000.00 *Not sure if included but I did not Include

CY
300,000.00
40,000.00
260,000.00 100%
156,000.00 60%
104,000.00 40%
40% *how to get the %
41,600.00

PY
260,000.00
156,000.00
104,000.00
60%
62,400.00 *Not sure if included but I did not Include

CY
40,000.00
60,000.00
(20,000.00)

(20,000.00)
4.00
(5,000.00)

CY
100,000.00
60,000.00
40,000.00

40,000.00
5.00
8,000.00

t sales to 3rd parties has the same mark-up rate

Parent Rates
3,000,000.00 100% 150%
1,500,000.00 50% 100%
1,500,000.00 50% 50%
Subs. Rates
1,500,000.00 100% 160%
900,000.00 60% 100%
600,000.00 40% 60%

CY
40,000.00
60%
160%
15,000.00

CY
60,000.00
60%
160%
22,500.00

CY
70,000.00
50%
150%
23,333.33

CY
30,000.00
50%
150%
10,000.00
1. Consolidated Sales Depreciable Assets

Sales by parent co. - Upstream - DA CY

Sales by subsidiary co. - SP of Interco. Sale 40,000.00
L: Intercompany sales - Cost of Interco. Sale 60,000.00
Consolidated Sales - Unrealized Profit (20,000.00)

2. Consolidated Cost of Sales Unrealized Profit (20,000.00)

RUL 4.00
Cost of Sales Parent - Realized Profit (5,000.00)
Cost of Sales Subsidiary -
L: Intercompany Sales - Downstream - DA CY
A: Unrealized profit in End. Inv. - SP of Interco. Sale 100,000.00
L: Realized profit in Beg. Inv. - Cost of Interco. Sale 60,000.00
A: Dep. in FVA on Inv. Unrealized Profit 40,000.00
Consolidated Cost of Sale -
Unrealized Profit 40,000.00
3. Consolidated Gross Profit RUL 5.00
Realized Profit 8,000.00
Consolidated Sales -
Consolidated Cost of Sale - Inventory (given is Inventory from Interco. Sale)
Consolidated Gross Profit -
Downstream - Inv. CY
4. Consolidated Net Income Attributable to Parent Interco. Inv - END 40,000.00
5. Consolidated Net Income Attributable to NCI Mark-up Rate 0%
Sales Rate 0%
4 5 Unrealized Profit #DIV/0!
Parent Subs.
Reported NI - -
NI Adjustments: Interco. Inv - BEG 60,000.00
A: Realized Profit in the Beg. Inv. #VALUE! #VALUE! Mark-up Rate 0%
L: Unrealized Profit in End. Inv. #VALUE! - Sales Rate 0%
Dividend Revenue - Realized Profit #DIV/0!
Land (assumed overval) -
Equipment (assumed underval) - Upstream - Inv. CY
Inventory (assumed overval) - Interco. Inv - END 70,000.00
Adjusted NI #VALUE! #VALUE! Mark-up Rate 0%
Share of parent - - Sales Rate 0%
Imp. Of Goodwill (2020) - - Unrealized Profit #DIV/0!
Consolidated NI #VALUE! #VALUE!

6. NCI Interco. Inv - BEG 30,000.00

Mark-up Rate 0%
NCI, beg. - Sales Rate 0%
NCINIS #VALUE! Realized Profit #DIV/0!
 L: Dividends - NCI -
NCINAS #VALUE! Inventory

7. Consolidated Retained Earnings Downstream Sale

SP of Interco. Sale -
RE beg. - Parent/Acquirer - Cost of Interco. Sale -
Gain/Exps. - Profit from Interco. Sale -
NIATP #VALUE! M: Unsold portion of Inv 0%
L: Divs. Dec. - Parent - Unrealized profit in End. -
Conso. RE #VALUE!

8. Consolidated Ending Inv. SP of Interco. Sale -

Cost of Interco. Sale -
Ending Inv. of Parent 500,000.00 Profit from Interco. Sale -
Ending Inv. of Subsidiary 200,000.00 M: Sold portion of Inv. @ 0%
L: Unrealized profit #VALUE! Realized Profit -
Conso. End. Inv. #VALUE!
Upstream Sale
SP of Interco. Sale -
Cost of Interco. Sale -
Profit from Interco. Sale -
M: Unsold portion of Inv 0%
Unrealized profit in End. -

SP of Interco. Sale -
Cost of Interco. Sale -
Profit from Interco. Sale -
M: Sold portion of Inv. @ 0%
Realized Profit -
rom Interco. Sale)
MCQs: Theories

1 B 11 A 21 C
2 C 12 A* 22 C
3 D 13 A 23 B
4 A 14 B 24 C
5 B 15 D 25 C/D
6 A 16 D 26 B
7 D 17 C 27 C
8 B 18 C 28 D
9 B 19 D 29 B
10 A 20 D 30 C

MCQs: Problems

1 Denzel Co. A

SP 188,000.00 125%
COS 150,400.00 100%
Gain 37,600.00 25%
M: Sold portion 65%
Realized Profit 24,440.00
NCI 30%
To be allocated to NCI 7,332.00

2 PP Corp. D*
PP Corp.
COGS 150,000.00
Sales 200,000.00
Mark-up on costs 0.75

Conso. Sales 308,000.00

Sales of PP corp. (200,000.00)
Sales of ST Co. (140,000.00)
Interco. Sales (32,000.00)
Sales % 125%
Total (25,600.00)
Mark-up % 25%
OG cost (6,400.00)

Conso. COS 231,000.00

COS of PP corp. (150,000.00)
COS of ST Co. (110,000.00)
 Interco. COS (29,000.00)

3 Par Corp. B

Advanced 70,000.00
CI 60%
Portion to be eliminated 42,000.00

4 A co D*

6
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10

11

12
13

14
15

16

17
18
19

20
21

22

23
24

25

26

27
28

29
30

31

32

33
34

35
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