Chapter 08 – Intercompany Indebtedness
P8-24 Consolidation Worksheet — Year after Retirement
a.
Book Value Calculations:
NCI
40%
+
Bennett
Corp.
60%
=
Common
Stock
+
Retained
Earnings
Beginning Book Value
68,000
102,000
100,000
70,000
+ Net Income
20,000
30,000
50,000
– Dividends
(4,000)
(6,000)
(10,000)
Ending Book Value
84,000
126,000
100,000
110,000
NCI
Bennett
Corp.
Net Income
20,000
30,000
+Amortization of Loss
315
473
Income to be eliminated
20,315
30,473
————————–——–——————————–————
Ending Book Value
84,000
126,000
+Amortization of Loss
315
473
Adjusted Book Value
84,315
126,473
Basic Consolidation Entry
Common Stock
100,000
← Common stock
Retained Earnings
70,000
← Beginning balance in retained earnings
Income from Stone Cont. Co.
30,473
← Bennett’s % of NI with adjustments
NCI in NI of Stone Cont. Co.
20,315
← NCI share of NI with adjustments
Dividends Declared
10,000
← 100% of Stone Cont. Co.’s dividends
Investment in Stone Cont. Co.
126,473
← Net book value with adjustments
NCI in NA of Stone Cont. Co.
84,315
← NCI share of BV with adjustments
Bond Consolidation Entry:
Bonds Payable
100,000
Investment in Stone Cont. Stock.
4,200
NCI in NA of Stone Cont. Co.
2,800
Interest Income
8,212
Investment in Stone Cont. Bonds
106,212
Interest Expense
9,000
