Parent Company and Subsidiary Parent Company and Subsi

Consolidated Income Statement Consolidated Retained Ear

For the Year Ended December 31, 2024 For the Year Ended December

Sales 750,000 Retained Earnings - Parent Company - 1/1/2024

Less: Cost of goods sold 340,000 Adjustment to convert to equity model/Parent's shar
Gross Profit 410,000 adjusted net increased in subsidiary's retained ear
Less: Expenses Retained Earnings - Son Company, 1/1/2024
Depreciation expenses 75,000 Less: Retained Earnings - Son Company, 1/1/2023
Interest expense 1,000 Increase in Retained Earnings
Other expenses 105,000 181,000 Less: Amortization of allocated excess - 2023
Consolidated Net Income 229,000 Total
Multiplied by Controlling Interest
Consolidated Retained Earnings, 1/1/2024
Add: Controlling Interest in Consolidated Net Income
Total
Parent Company and Subsidiary Less: Dividends paid - Parent Company for 2024
Consolidated Balance Sheet Consolidated Retained Earnings, 12/31/2024
December 31, 2024

ASSETS
Cash 242,500
Accounts receivable 230,000
Inventory 270,000
Land 221,000
Building 870,000
Less: Accumulated depreciation 460,000 410,000
Equipment 350,000
Less: Accumulated depreciation 150,000 200,000
Goodwill 9,500
TOTAL ASSETS 1,583,000

LIABILITIES and STOCKHOLDERS' EQUITY

LIABILITIES
Accounts payable 200,000
Bonds payable 300,000
Less: Discount on bonds payable 2,000 298,000
TOTAL LIABILITIES 498,000

STOCKHOLDERS' EQUITY
Common stock, P10 par 500,000
Retained Earnings, 12/31 585,000
TOTAL STOCKHOLDERSS' EQUITY 1,085,000
TOTAL LIABILITIES and STOCKHOLDERS' EQUITY 1,583,000
 Parent Company and Subsidiary
Consolidated Income Statement
For the Year Ended December 31, 2023

Sales 750,000
Less: Cost of goods sold 340,000
Gross Profit 410,000
Less: Expenses
Depreciation expenses 75,000
Interest expense 1,000
Other expenses 105,000 181,000
Consolidated Net Income 229,000

Parent Company and Subsidiary

Consolidated Balance Sheet
December 31, 2023

ASSETS
Cash 242,500
Accounts receivable 230,000
Inventory 270,000
Land 221,000
Building 870,000
Less: Accumulated depreciation 460,000 410,000
Equipment 350,000
Less: Accumulated depreciation 150,000 200,000
Goodwill 9,500
TOTAL ASSETS 1,583,000

LIABILITIES and STOCKHOLDERS' EQUITY

LIABILITIES
Accounts payable 200,000
Bonds payable 300,000
Less: Discount on bonds payable 2,000 298,000

TOTAL LIABILITIES 498,000

STOCKHOLDERS' EQUITY
Common stock, P10 par 500,000
Retained Earnings, 12/31 585,000
TOTAL STOCKHOLDERSS' EQUITY 1,085,000
TOTAL LIABILITIES and STOCKHOLDERS' EQUITY 1,583,000
 Parent Company and Subsidiary
Consolidated Income Statement
For the Year Ended December 31, 2023

Sales 750,000
Less: Cost of goods sold 340,000
Gross Profit 410,000
Less: Expenses
Depreciation expenses 75,000
Interest expense 1,000
Other expenses 105,000 181,000
Consolidated Net Income 229,000

Parent Company and Subsidiary

Consolidated Balance Sheet
December 31, 2023

ASSETS
Cash 306,000
Accounts receivable 230,000
Inventory 270,000
Land 221,000
Building 870,000
Less: Accumulated depreciation 460,000 410,000
Equipment 350,000
Less: Accumulated depreciation 150,000 200,000
Goodwill 7,500
TOTAL ASSETS 1,644,500

LIABILITIES and STOCKHOLDERS' EQUITY

LIABILITIES
Accounts payable 200,000
Bonds payable 300,000
Less: Discount on bonds payable 2,000 298,000
TOTAL LIABILITIES 498,000

STOCKHOLDERS' EQUITY
Common stock, P10 par 500,000
Retained Earnings, 12/31 563,900
TOTAL STOCKHOLDERSS' EQUITY 1,063,900
TOTAL LIABILITIES and STOCKHOLDERS' EQUITY 1,561,900
80% COST MODEL - PARTIAL GOODWILL
Worksheet for Consolidated Financial Statements, December 31, 2023

Income Statement Parent Co. Son Co. Debit Credit Consolidated

Sales 400,000 200,000 600,000
Dividend income 28,700 (4) 28,700 0
Total Revenue 428,700 200,000 600,000
Cost of goods sold 170,000 115,000 (3) 5,000 290,000
Depreciation expense 50,000 20,000 (3) 5,000 75,000
Interest expense (3) 1,000 1,000
Goodwill impairment loss (3) 2,500 2,500
Other expenses 40,000 15,000 55,000
Total Cost and Expenses 260,000 150,000 423,500
Net Income 168,700 50,000 176,500
NCI in Net Income - Subsidiary (5) 7,800 - 7,800
Net Incometo Retained Earnings 168,700 50,000 168,700

Statement of Retained Earnings

Retained Earnings, 1/1
Parent Company 300,000 300,000
Son Company 100,000 (1) 100,000 0
Net Income 168,700 50,000 168,700
Total 468,700 150,000 468,700
Less: Dividend paid
Parent Company 60,000 60,000
Son company 30,000 (4) 30,000 0
Retained Earnings, 12/31 408,700 120,000 408,700

Balance Sheet
Cash 194,000 75,000 269,000
Accounts receivable 75,000 50,000 125,000
Inventory 100,000 75,000 (2) 5,000 (3) 5,000 175,000
Land 175,000 40,000 (2) 6,000 221,000
Equipment 200,000 150,000 350,000
Building 600,000 450,000 (2) 180,000 870,000
Discount on bonds payable (2) 4,000 (3) 1,000 3,000
Goodwill (2) 10,000 (3) 2,500 7,500
Investment in Son Company 314,700 (1) 240,000
(2) 70,000
(4) 4,700 0
TOTAL 1,658,700 840,000 2,020,500

Accumulated depreciation - equipment 112,500 80,000 (2) 80,000 (3) 10,000 122,500
Accumulated depreciation - buildings 337,500 240,000 (2) 160,000
(3) 5,000 412,500
Accounts payable 100,000 100,000 200,000
Bonds payable 200,000 100,000 300,000
Common stock, P10 par 500,000 500,000
Common stock, P10 par 200,000 (1) 200,000 0
Retained Earnings, 12/31 from above 408,700 120,000 408,700
Noncontrolling Interest (4) 6,000 (1) 60,000
(2) 15,000
(5) 7,800 76,800
TOTAL 1,658,700 840,000 626,000 626,000 2,020,500

80% COST MODEL - PARTIAL GOODWILL

Worksheet for Consolidated Financial Statements, December 31, 2024

Income Statement Parent Co. Son Co. Debit Credit Consolidated

Sales 450,000 300,000 750,000
Dividend income 55,200 (4) 55,200 0
Total Revenue 505,200 300,000 750,000
Cost of goods sold 180,000 160,000 340,000
Depreciation expense 50,000 20,000 (3) 5,000 75,000
Interest expense (3) 1,000 1,000
Goodwill impairment loss 0
Other expenses 60,000 45,000 105,000
Total Cost and Expenses 290,000 225,000 521,000
Net Income 215,200 75,000 229,000
NCI in Net Income - Subsidiary (5) 13,800 -13,800
Net Income to Retained Earnings 215,200 75,000 215,200

Statement of Retained Earnings

Retained Earnings, 1/1
Parent Company 408,700 408,700
Son Company 120,000 (1) 120,000 0
Net Income 215,200 75,000 215,200
Total 623,900 195,000 623,900
Less: Dividend paid
Parent Company 60,000 60,000
Son company 40,000 (4) 40,000 0
Retained Earnings, 12/31 563,900 155,000 563,900

Balance Sheet
Cash 221,000 85,000 306,000
Accounts receivable 150,000 80,000 230,000
Inventory 180,000 90,000 270,000
Land 175,000 40,000 (2) 6,000 221,000
Equipment 200,000 150,000 350,000
Building 600,000 450,000 (3) 180,000 870,000
Discount on bonds payable (2) 3,000 (3) 1,000 2,000
Goodwill (2) 7,500 7,500
Investment in Son Company 337,900 (1) 256,000
(3) 58,700
(4) 23,200 0
TOTAL 1,863,900 895,000 2,256,500

Accumulated depreciation - equipment 125,000 85,000 (2) 70,000 (3) 10,000 150,000
Accumulated depreciation - buildings 375,000 255,000 (2) 165,000
(3) 5,000 460,000
Accounts payable 100,000 100,000 200,000
Bonds payable 200,000 100,000 300,000
Common stock, P10 par 500,000 500,000
Common stock, P10 par 200,000 (1) 200,000 0
Retained Earnings, 12/31 from above 563,900 155,000 563,900
Non Controlling Interest (4) 8,000 (2) 64,000
(2) 12,800
(6) 13,800 82,600
TOTAL 1,863,900 895,000 659,500 659,500 2,256,500
 Pa
Co
Working Paper Elimination Entries (12/31/23) For th

1 Common stock - Son Company 200,000 Sales

Retained Earnings - Son Company 100,000 Less: Cost of goods s
Investment in Son Company 240,000 Gross Profit
Noncontrolling Interest 60,000 Less: Expenses
To eliminate intercompany investment and equity accounts
of subsidiary on date of acquisition; and establish non-controlling
interest on date of acquisition.
2 Inventory 5,000
Accumulated depreciation-equipment 80,000 Net Income
Accumulated depreciation - buildings 160,000 NCI in Net Income -
Land 6,000 Consolidated Net In
Discount on bonds payable 4,000
Goodwill 10,000
Buildings 180,000 Pa
Noncontrolling Interest (P75,000 X 20%) 15,000
Investment in Son Company 70,000
To allocate excess of cost over book value of identifiable assets acquired
with remainder to goodwill; and to establish noncontrolling interest
Cash
3 Cost of goods sold 5,000 Accounts receivable
Depreciation expense 5,000 Inventory
Accumulated depreciation - buildings 5,000 Land
Interest expense 1,000 Building
Goodwill impairment loss 2,500 Less: Accumulated d
Inventory 5,000 Equipment
Accumulated depreciation - equipment 10,000 Less: Accumulated d
Discount on bonds payable 1,000 Goodwill
Goodwill 2,500 TOTAL ASSETS
To provide for 2023 impairment loss and depreciation and amortization on
differences between acquisition date fair value and book value of Son's LIABIL
identifiable assets and liabilities
Accounts payable
4 Equity in Subsidiary Income 28,700 Bonds payable
Noncontrolling Interest (P30,000 X 20%) 6,000 Less: Discount on bo
Dividend paid - Son Company 30,000 TOTAL LIABILITIES

Investment in Son Company 4,700

To eliminate intercompany dividends and noncontrolling interest
share of dividends Common stock, P10
Retained Earnings, 1
5 NCI in Net Income - Subsidiary 7,800 TOTAL STOCKHOLD
Noncontrolling Interest 7,800 TOTAL LIABILITIES a
 To establish noncontrolling interest in subsidiary's adjusted net income

Pa
Working Paper Elimination Entries (12/31/24) Co
For th
1 Common Stock - Son Company 200,000
Retained Earnings - Son company, 1/1/24 120,000 Sales
Investment in Son Company 256,000 Less: Cost of goods s
Non Controlling Interest 64,000 Gross Profit
To eliminate intercompany investment and equity accounts of Less: Expenses
subsidiary and to establish non-controlling interest 16,000

2 Accumulated depreciation - equipment 70,000

Accumulated depreciation - buildings 165,000 Consolidated Net In
Land 6,000
Discount on bonds payable 3,000
Goodwill 7,500
Buildings 180,000
Non Controlling Interest 12,800
Investment in Son Company 58,700
To allocate excess of cost over book value of identifiable Pa
assets acquired with remainder to goodwill; and to establish
non-controlling interest on January 1, 2024

3 Depreciation expense 5,000

Interest expense 5,000 Cash
Discount on bonds payable 1,000 Accounts receivable
Accumulated depreciation - equipment 10,000 Inventory
Discount on bonds payable 1,000 Land
To provide for 2024 depreciation and amortization on differences Building
between acquisition date fair value andf book value of Son's identifiable Less: Accumulated d
assets and liabilities Equipment
Less: Accumulated d
4 Equity in Subsidiary Income 55,200 Goodwill
Non-Controlling Interest 8,000 TOTAL ASSETS
Dividends paid - Son Company 40,000
Investment in Son Company 23,200 LIABIL
To eliminate intercaompany dividends and investment income under equity
 method and establish share of dividends Accounts payable
Bonds payable
5 Non-Controlling Interest in Net Income of Subsidiary 13,800 Less: Discount on bo
Non-Controlling Interest 13,800
To establish non controlling interest in subsidiary's adjusted net income TOTAL LIABILITIES

Common stock, P10

Retained Earnings, 1
TOTAL STOCKHOLD
TOTAL LIABILITIES a
 Parent Company and Subsidiary
Consolidated Income Statement
For the Year Ended December 31, 2023

600,000
Less: Cost of goods sold 290,000
Gross Profit 310,000
Less: Expenses
Depreciation expenses 75,000
Interest expense 1,000
Goodwill impairment loss 2,500
Other expenses 55,000 133,500
Net Income 176,500
NCI in Net Income - Subsidiary - 7,800
Consolidated Net Income 168,700

Parent Company and Subsidiary

Consolidated Balance Sheet
December 31, 2023

ASSETS
269,000
Accounts receivable 125,000
Inventory 175,000
Land 221,000
Building 870,000
Less: Accumulated depreciation 412,500 457,500
Equipment 350,000
Less: Accumulated depreciation 122,500 227,500
Goodwill 7,500
TOTAL ASSETS 1,482,500

LIABILITIES and STOCKHOLDERS' EQUITY

LIABILITIES
Accounts payable 200,000
Bonds payable 300,000
Less: Discount on bonds payable 3,000 297,000
TOTAL LIABILITIES 497,000

STOCKHOLDERS' EQUITY
Common stock, P10 par 500,000
Retained Earnings, 12/31 408,700
TOTAL STOCKHOLDERS' EQUITY 908,700
TOTAL LIABILITIES and STOCKHOLDERS' EQUITY 1,405,700
 Parent Company and Subsidiary
Consolidated Income Statement
For the Year Ended December 31, 2023

750,000
Less: Cost of goods sold 340,000
Gross Profit 410,000
Less: Expenses
Depreciation expenses 75,000
Interest expense 1,000
Other expenses 105,000 181,000
Consolidated Net Income 229,000

Parent Company and Subsidiary

Consolidated Balance Sheet
December 31, 2023

ASSETS
306,000
Accounts receivable 230,000
Inventory 270,000
Land 221,000
Building 870,000
Less: Accumulated depreciation 460,000 410,000
Equipment 350,000
Less: Accumulated depreciation 150,000 200,000
Goodwill 7,500
TOTAL ASSETS 1,644,500

LIABILITIES and STOCKHOLDERS' EQUITY

LIABILITIES
Accounts payable 200,000
Bonds payable 300,000
Less: Discount on bonds payable 2,000 298,000

TOTAL LIABILITIES 498,000

STOCKHOLDERS' EQUITY
Common stock, P10 par 500,000
Retained Earnings, 12/31 563,900
TOTAL STOCKHOLDERSS' EQUITY 1,063,900
TOTAL LIABILITIES and STOCKHOLDERS' EQUITY 1,561,900
80% COST MODEL - PARTIAL GOODWILL
Worksheet for Consolidated Financial Statements, December 31, 2023

Income Statement Parent Co. Son Co. Debit Credit Consolidated

Sales 400,000 200,000 600,000
Dividend income 24,000 (4) 24,000 0
Total Revenue 424,000 200,000 600,000
Cost of goods sold 170,000 115,000 (3) 5,000 290,000
Depreciation expense 50,000 20,000 (3) 5,000 75,000
Interest expense (3) 1,000 1,000
Goodwill impairment loss (3) 3,125 3,125
Other expenses 40,000 15,000 55,000
Total Cost and Expenses 260,000 150,000 424,125
Net Income 164,000 50,000 175,875
NCI in Net Income - Subsidiary (5) 7,175 - 7,175
Net Incometo Retained Earnings 164,000 50,000 168,700

Statement of Retained Earnings

Retained Earnings, 1/1
Parent Company 300,000 300,000
Son Company 100,000 (1) 100,000 0
Net Income 164,000 50,000 168,700
Total 464,000 150,000 468,700
Less: Dividend paid
Parent Company 60,000 60,000
Son company 30,000 (4) 30,000 0
Retained Earnings, 12/31 404,000 120,000 408,700

Balance Sheet
Cash 194,000 75,000 269,000
Accounts receivable 75,000 50,000 125,000
Inventory 100,000 75,000 (2) 5,000 (3) 5,000 175,000
Land 175,000 40,000 (2) 6,000 221,000
Equipment 200,000 150,000 350,000
Building 600,000 450,000 (2) 180,000 870,000
Discount on bonds payable (2) 4,000 (3) 1,000 3,000
Goodwill (2) 12,500 (3) 3,125 9,375
Investment in Son Company 310,000 (1) 240,000
(2) 70,000 0
TOTAL 1,654,000 840,000 2,022,375

Accumulated depreciation - equipment 112,500 80,000 (2) 80,000 (3) 10,000 122,500
Accumulated depreciation - buildings 337,500 240,000 (2) 160,000
(3) 5,000 412,500
Accounts payable 100,000 100,000 200,000
Bonds payable 200,000 100,000 300,000
Common stock, P10 par 500,000 500,000
Common stock, P10 par 200,000 (1) 200,000 0
Retained Earnings, 12/31 from above 404,000 120,000 408,700
Noncontrolling Interest (4) 6,000 (1) 60,000
(2) 17,500
(5) 7,175 78,675
TOTAL 1,654,000 840,000 623,800 623,800 2,022,375

80% COST MODEL - PARTIAL GOODWILL

Worksheet for Consolidated Financial Statements, December 31, 2024

Income Statement Parent Co. Son Co. Debit Credit Consolidated

Sales 450,000 300,000 750,000
Dividend income 32,000 (5) 32,000 0
Total Revenue 482,000 300,000 750,000
Cost of goods sold 180,000 160,000 340,000
Depreciation expense 50,000 20,000 (4) 5,000 75,000
Interest expense (4) 1,000 1,000
Goodwill impairment loss 0
Other expenses 60,000 45,000 105,000
Total Cost and Expenses 290,000 225,000 521,000
Net Income 192,000 75,000 229,000
NCI in Net Income - Subsidiary (6) 13,800 -13,800
Net Income to Retained Earnings 192,000 75,000 215,200

Statement of Retained Earnings

Retained Earnings, 1/1
Parent Company 404,000 (5) 11,300 (5) 16,000 408,700
Son Company 120,000 (2) 120,000 0
Net Income 192,000 75,000 215,200
Total 596,000 195,000 623,900
Less: Dividend paid
Parent Company 60,000 60,000
Son company 40,000 (6) 40,000 0
Retained Earnings, 12/31 536,000 155,000 563,900

Balance Sheet
Cash 221,000 85,000 306,000
Accounts receivable 150,000 80,000 230,000
Inventory 180,000 90,000 (3) 5,000 (4) 5,000 270,000
Land 175,000 40,000 (3) 6,000 221,000
Equipment 200,000 150,000 350,000
Building 600,000 450,000 (3) 180,000 870,000
Discount on bonds payable (3) 4,000 (4) 2,000 2,000
Goodwill (3) 12,500 (4) 3,125 9,375
Investment in Son Company 310,000 (1) 16,000 (2) 256,000
(3) 70,000 0
TOTAL 1,836,000 895,000 2,258,375

Accumulated depreciation - equipment 125,000 85,000 (3) 80,000 (4) 20,000 150,000
Accumulated depreciation - buildings 375,000 255,000 (3) 160,000
(4) 10,000 460,000
Accounts payable 100,000 100,000 200,000
Bonds payable 200,000 100,000 300,000
Common stock, P10 par 500,000 500,000
Common stock, P10 par 200,000 (2) 200,000 0
Retained Earnings, 12/31 from above 536,000 155,000 563,900
Non Controlling Interest (4) 2,825 (2) 64,000
(6) 8,000 (3) 17,500
(6) 13,800 84,475
TOTAL 1,836,000 895,000 687,425 687,425 2,258,375
 Pa
Co
Working Paper Elimination Entries (12/31/23) For th

1 Common stock - Son Company 200,000 Sales

Retained Earnings - Son Company 100,000 Less: Cost of goods s
Investment in Son Company 240,000 Gross Profit
Noncontrolling Interest 60,000 Less: Expenses
To eliminate intercompany investment and equity accounts
of subsidiary on date of acquisition; and establish non-controlling
interest on date of acquisition.
2 Inventory 5,000
Accumulated depreciation-equipment 80,000 Net Income
Accumulated depreciation - buildings 160,000 NCI in Net Income -
Land 6,000 Consolidated Net In
Discount on bonds payable 4,000
Goodwill 12,500
Buildings 180,000 Pa
Noncontrolling Interest (P75,000 X 20%) 17,500
Investment in Son Company 70,000
To allocate excess of cost over book value of identifiable assets acquired
with remainder to goodwill; and to establish noncontrolling interest
Cash
3 Cost of goods sold 5,000 Accounts receivable
Depreciation expense 5,000 Inventory
Accumulated depreciation - buildings 5,000 Land
Interest expense 1,000 Building
Goodwill impairment loss 3,125 Less: Accumulated d
Inventory 5,000 Equipment
Accumulated depreciation - equipment 10,000 Less: Accumulated d
Discount on bonds payable 1,000 Goodwill
Goodwill 3,125 TOTAL ASSETS
To provide for 2023 impairment loss and depreciation and amortization on
differences between acquisition date fair value and book value of Son's LIABIL
identifiable assets and liabilities
Accounts payable
4 Dividend Income - Parent 24,000 Bonds payable
Noncontrolling Interest (P30,000 X 20%) 6,000 Less: Discount on bo
Dividend paid - Son Company 30,000 TOTAL LIABILITIES
To eliminate intercompany dividends and noncontrolling interest
share of dividends
Common stock, P10
5 NCI in Net Income - Subsidiary 7,175 Retained Earnings, 1
Noncontrolling Interest 7,175 TOTAL STOCKHOLD
To establish noncontrolling interest in subsidiary's adjusted net income TOTAL LIABILITIES a
 Pa
Working Paper Elimination Entries (12/31/24) Co
For th
1 Investment in Son Company 16,000
Retained Earnings - Parent Company 16,000 Sales
To provide entry to convert from cost method to the equity Less: Cost of goods s
method or entry to establish reciprocity of the beginning Gross Profit
of the year, 1/1/2024. Less: Expenses

2 Common stock - Son Company 200,000

Retained Earnings - Son Company, 1/1/24 120,000
Investment in Son Company 256,000 Consolidated Net In
Non Controlling Interest 64,000
To eliminate intercompany investment and equity accounts of
subsidiary and to establish non-controlling interest

3 Inventory 5,000
Accumulated depreciation - equipment 80,000
Accumulated depreciation - buildings 160,000 Pa
Land 6,000
Discount on bonds payable 4,000
Goodwill 12,500
Buildings 180,000
Non Controlling Interest 17,500 Cash
Investment in Son Company 70,000 Accounts receivable
To allocate excess of cost over book value of identifiable Inventory
assets acquired with remainder to goodwill; and to establish Land
non-controlling interest on January 1, 2024 Building
Less: Accumulated d
4 Retained Earnings - Parent Company, 1/1/24 11,300 Equipment
Non Controlling Interest (P11,000 X 20%) 2,825 Less: Accumulated d
Depreciation expense 5,000 Goodwill
Accumulated depreciation - buildings 10,000 TOTAL ASSETS
Interest expense 1,000
Inventory 5,000 LIABIL
Accumulated depreciation - equipment 20,000
Discount on bonds payable 2,000 Accounts payable
 Goodwill 3,125 Bonds payable
To provide for years 2023 and 2024 depreciation and Less: Discount on bo
amortization on differences between acquisition date fair TOTAL LIABILITIES
value and book value of Son's identifiable assets and liabilities

Common stock, P10

5 Dividend income - Parent Company 32,000 Retained Earnings, 1
Non-Controlling Interest (P40,000 X 20%) 8,000 TOTAL STOCKHOLD
Dividend paid - Son Company 40,000 TOTAL LIABILITIES a
To eliminate intercompany dividends and non-controlling interest
share of dividends

6 Non-Controlling Interest in Net Income of Subsidiary 13,800

Non-Controlling Interest 13,800
To establish non-co0ntrolling interest in subsidiary's adjusted net income
 Parent Company and Subsidiary
Consolidated Income Statement
For the Year Ended December 31, 2023

600,000
Less: Cost of goods sold 290,000
Gross Profit 310,000
Less: Expenses
Depreciation expenses 75,000
Interest expense 1,000
Goodwill impairment loss 3,125
Other expenses 55,000 134,125
Net Income 175,875
NCI in Net Income - Subsidiary - 7,175
Consolidated Net Income 168,700

Parent Company and Subsidiary

Consolidated Balance Sheet
December 31, 2023

ASSETS
269,000
Accounts receivable 125,000
Inventory 175,000
Land 221,000
Building 870,000
Less: Accumulated depreciation 412,500 457,500
Equipment 350,000
Less: Accumulated depreciation 122,500 227,500
Goodwill 9,375
TOTAL ASSETS 1,484,375

LIABILITIES and STOCKHOLDERS' EQUITY

LIABILITIES
Accounts payable 200,000
Bonds payable 300,000
Less: Discount on bonds payable 3,000 297,000
TOTAL LIABILITIES 497,000

STOCKHOLDERS' EQUITY
Common stock, P10 par 500,000
Retained Earnings, 12/31 408,700
TOTAL STOCKHOLDERS' EQUITY 908,700
TOTAL LIABILITIES and STOCKHOLDERS' EQUITY 1,405,700
 Parent Company and Subsidiary
Consolidated Income Statement
For the Year Ended December 31, 2023

750,000
Less: Cost of goods sold 340,000
Gross Profit 410,000
Less: Expenses
Depreciation expenses 75,000
Interest expense 1,000
Other expenses 105,000 181,000
Consolidated Net Income 229,000

Parent Company and Subsidiary

Consolidated Balance Sheet
December 31, 2023

ASSETS
306,000
Accounts receivable 230,000
Inventory 270,000
Land 221,000
Building 870,000
Less: Accumulated depreciation 460,000 410,000
Equipment 350,000
Less: Accumulated depreciation 150,000 200,000
Goodwill 9,375
TOTAL ASSETS 1,646,375

LIABILITIES and STOCKHOLDERS' EQUITY

LIABILITIES
Accounts payable 200,000
Bonds payable 300,000
Less: Discount on bonds payable 2,000 298,000
TOTAL LIABILITIES 498,000

STOCKHOLDERS' EQUITY
Common stock, P10 par 500,000
Retained Earnings, 12/31 563,900
TOTAL STOCKHOLDERSS' EQUITY 1,063,900
TOTAL LIABILITIES and STOCKHOLDERS' EQUITY 1,561,900
80% COST MODEL - PARTIAL GOODWILL
Worksheet for Consolidated Financial Statements, December 31, 2023

Income Statement Parent Co. Son Co. Debit Credit Consolidated

Sales 400,000 200,000 600,000
Dividend income 28,700 (4) 28,700 0
Total Revenue 428,700 200,000 600,000
Cost of goods sold 170,000 115,000 (3) 5,000 290,000
Depreciation expense 50,000 20,000 (3) 5,000 75,000
Interest expense (3) 1,000 1,000
Goodwill impairment loss (3) 3,125 3,125
Other expenses 40,000 15,000 55,000
Total Cost and Expenses 260,000 150,000 424,125
Net Income 168,700 50,000 175,875
NCI in Net Income - Subsidiary (5) 7,175 - 7,175
Net Incometo Retained Earnings 168,700 50,000 168,700

Statement of Retained Earnings

Retained Earnings, 1/1
Parent Company 300,000 300,000
Son Company 100,000 (1) 100,000 0
Net Income 168,700 50,000 168,700
Total 468,700 150,000 468,700
Less: Dividend paid
Parent Company 60,000 60,000
Son company 30,000 (4) 30,000 0
Retained Earnings, 12/31 408,700 120,000 408,700

Balance Sheet
Cash 194,000 75,000 269,000
Accounts receivable 75,000 50,000 125,000
Inventory 100,000 75,000 (2) 5,000 (3) 5,000 175,000
Land 175,000 40,000 (2) 6,000 221,000
Equipment 200,000 150,000 350,000
Building 600,000 450,000 (2) 180,000 870,000
Discount on bonds payable (2) 4,000 (3) 1,000 3,000
Goodwill (2) 12,500 (3) 3,125 9,375
Investment in Son Company 314,700 (1) 240,000
(2) 70,000
(4) 4,700 0
TOTAL 1,658,700 840,000 2,022,375

Accumulated depreciation - equipment 112,500 80,000 (2) 80,000 (3) 10,000 122,500
Accumulated depreciation - buildings 337,500 240,000 (2) 160,000
(3) 5,000 412,500
Accounts payable 100,000 100,000 200,000
Bonds payable 200,000 100,000 300,000
Common stock, P10 par 500,000 500,000
Common stock, P10 par 200,000 (1) 200,000 0
Retained Earnings, 12/31 from above 408,700 120,000 408,700
Noncontrolling Interest (4) 6,000 (1) 60,000
(2) 17,500
(5) 7,175 78,675
TOTAL 1,658,700 840,000 628,500 628,500 2,022,375

80% COST MODEL - PARTIAL GOODWILL

Worksheet for Consolidated Financial Statements, December 31, 2024

Income Statement Parent Co. Son Co. Debit Credit Consolidated

Sales 450,000 300,000 750,000
Dividend income 55,200 (4) 55,200 0
Total Revenue 505,200 300,000 750,000
Cost of goods sold 180,000 160,000 340,000
Depreciation expense 50,000 20,000 (3) 5,000 75,000
Interest expense (3) 1,000 1,000
Goodwill impairment loss 0
Other expenses 60,000 45,000 105,000
Total Cost and Expenses 290,000 225,000 521,000
Net Income 215,200 75,000 229,000
NCI in Net Income - Subsidiary (5) 13,800 -13,800
Net Income to Retained Earnings 215,200 75,000 215,200

Statement of Retained Earnings

Retained Earnings, 1/1
Parent Company 408,700 408,700
Son Company 120,000 (1) 120,000 0
Net Income 215,200 75,000 215,200
Total 623,900 195,000 623,900
Less: Dividend paid
Parent Company 60,000 60,000
Son company 40,000 (4) 40,000 0
Retained Earnings, 12/31 563,900 155,000 563,900

Balance Sheet
Cash 221,000 85,000 306,000
Accounts receivable 150,000 80,000 230,000
Inventory 180,000 90,000 270,000
Land 175,000 40,000 (2) 6,000 221,000
Equipment 200,000 150,000 350,000
Building 600,000 450,000 (3) 180,000 870,000
Discount on bonds payable (2) 3,000 (3) 1,000 2,000
Goodwill (2) 9,375 9,375
Investment in Son Company 337,900 (1) 256,000
(3) 58,700
(4) 23,200 0
TOTAL 1,863,900 895,000 2,258,375

Accumulated depreciation - equipment 125,000 85,000 (2) 70,000 (3) 10,000 150,000
Accumulated depreciation - buildings 375,000 255,000 (2) 165,000
(3) 5,000 460,000
Accounts payable 100,000 100,000 200,000
Bonds payable 200,000 100,000 300,000
Common stock, P10 par 500,000 500,000
Common stock, P10 par 200,000 (1) 200,000 0
Retained Earnings, 12/31 from above 563,900 155,000 563,900
Non Controlling Interest (4) 8,000 (2) 64,000
(2) 14,675
(6) 13,800 84,475
TOTAL 1,863,900 895,000 661,375 661,375 2,258,375
 Pa
Co
Working Paper Elimination Entries (12/31/23) For th

1 Common stock - Son Company 200,000 Sales

Retained Earnings - Son Company 100,000 Less: Cost of goods s
Investment in Son Company 240,000 Gross Profit
Noncontrolling Interest 60,000 Less: Expenses
To eliminate intercompany investment and equity accounts
of subsidiary on date of acquisition; and establish non-controlling
interest on date of acquisition.
2 Inventory 5,000
Accumulated depreciation-equipment 80,000 Net Income
Accumulated depreciation - buildings 160,000 NCI in Net Income -
Land 6,000 Consolidated Net In
Discount on bonds payable 4,000
Goodwill 12,500
Buildings 180,000 Pa
Noncontrolling Interest (P75,000 X 20%) 17,500
Investment in Son Company 70,000
To allocate excess of cost over book value of identifiable assets acquired
with remainder to goodwill; and to establish noncontrolling interest
Cash
3 Cost of goods sold 5,000 Accounts receivable
Depreciation expense 5,000 Inventory
Accumulated depreciation - buildings 5,000 Land
Interest expense 1,000 Building
Goodwill impairment loss 3,125 Less: Accumulated d
Inventory 5,000 Equipment
Accumulated depreciation - equipment 10,000 Less: Accumulated d
Discount on bonds payable 1,000 Goodwill
Goodwill 3,125 TOTAL ASSETS
To provide for 2023 impairment loss and depreciation and amortization on
differences between acquisition date fair value and book value of Son's LIABIL
identifiable assets and liabilities
Accounts payable
4 Equity in Subsidiary Income 28,700 Bonds payable
Noncontrolling Interest (P30,000 X 20%) 6,000 Less: Discount on bo
Dividend paid - Son Company 30,000 TOTAL LIABILITIES
Investment in Son Company 4,700
To eliminate intercompany dividends and noncontrolling interest
share of dividends
Common stock, P10
Retained Earnings, 1
5 NCI in Net Income - Subsidiary 7,175 TOTAL STOCKHOLD
Noncontrolling Interest 7,175 TOTAL LIABILITIES a
 To establish noncontrolling interest in subsidiary's adjusted net income

Pa
Working Paper Elimination Entries (12/31/24) Co
For th
1 Common Stock - Son Company 200,000
Retained Earnings - Son company, 1/1/24 120,000 Sales
Investment in Son Company 256,000 Less: Cost of goods s
Non Controlling Interest 64,000 Gross Profit
To eliminate intercompany investment and equity accounts of Less: Expenses
subsidiary and to establish non-controlling interest 16,000

2 Accumulated depreciation - equipment 70,000

Accumulated depreciation - buildings 165,000 Consolidated Net In
Land 6,000
Discount on bonds payable 3,000
Goodwill 9,375
Buildings 180,000
Non Controlling Interest 14,675
Investment in Son Company 58,700
To allocate excess of cost over book value of identifiable Pa
assets acquired with remainder to goodwill; and to establish
non-controlling interest on January 1, 2024

3 Depreciation expense 5,000

Interest expense 5,000 Cash
Discount on bonds payable 1,000 Accounts receivable
Accumulated depreciation - equipment 10,000 Inventory
Discount on bonds payable 1,000 Land
To provide for 2024 depreciation and amortization on differences Building
between acquisition date fair value andf book value of Son's identifiable Less: Accumulated d
assets and liabilities Equipment
Less: Accumulated d
4 Equity in Subsidiary Income 55,200 Goodwill
Non-Controlling Interest 8,000 TOTAL ASSETS
Dividends paid - Son Company 40,000
Investment in Son Company 23,200 LIABIL
To eliminate intercaompany dividends and investment income under equity
 method and establish share of dividends Accounts payable
Bonds payable
5 Non-Controlling Interest in Net Income of Subsidiary 13,800 Less: Discount on bo
Non-Controlling Interest 13,800
To establish non controlling interest in subsidiary's adjusted net income TOTAL LIABILITIES

Common stock, P10

Retained Earnings, 1
TOTAL STOCKHOLD
TOTAL LIABILITIES a
 Parent Company and Subsidiary
Consolidated Income Statement
For the Year Ended December 31, 2023

600,000
Less: Cost of goods sold 290,000
Gross Profit 310,000
Less: Expenses
Depreciation expenses 75,000
Interest expense 1,000
Goodwill impairment loss 3,125
Other expenses 55,000 134,125
Net Income 175,875
NCI in Net Income - Subsidiary - 7,175
Consolidated Net Income 168,700

Parent Company and Subsidiary

Consolidated Balance Sheet
December 31, 2023

ASSETS
269,000
Accounts receivable 125,000
Inventory 175,000
Land 221,000
Building 870,000
Less: Accumulated depreciation 412,500 457,500
Equipment 350,000
Less: Accumulated depreciation 122,500 227,500
Goodwill 9,375
TOTAL ASSETS 1,484,375

LIABILITIES and STOCKHOLDERS' EQUITY

LIABILITIES
Accounts payable 200,000
Bonds payable 300,000
Less: Discount on bonds payable 3,000 297,000
TOTAL LIABILITIES 497,000

STOCKHOLDERS' EQUITY
Common stock, P10 par 500,000
Retained Earnings, 12/31 408,700
TOTAL STOCKHOLDERS' EQUITY 908,700
TOTAL LIABILITIES and STOCKHOLDERS' EQUITY 1,405,700
 Parent Company and Subsidiary
Consolidated Income Statement
For the Year Ended December 31, 2023

750,000
Less: Cost of goods sold 340,000
Gross Profit 410,000
Less: Expenses
Depreciation expenses 75,000
Interest expense 1,000
Other expenses 105,000 181,000
Consolidated Net Income 229,000

Parent Company and Subsidiary

Consolidated Balance Sheet
December 31, 2023

ASSETS
306,000
Accounts receivable 230,000
Inventory 270,000
Land 221,000
Building 870,000
Less: Accumulated depreciation 460,000 410,000
Equipment 350,000
Less: Accumulated depreciation 150,000 200,000
Goodwill 9,375
TOTAL ASSETS 1,646,375

LIABILITIES and STOCKHOLDERS' EQUITY

LIABILITIES
Accounts payable 200,000
Bonds payable 300,000
Less: Discount on bonds payable 2,000 298,000

TOTAL LIABILITIES 498,000

STOCKHOLDERS' EQUITY
Common stock, P10 par 500,000
Retained Earnings, 12/31 563,900
TOTAL STOCKHOLDERSS' EQUITY 1,063,900
TOTAL LIABILITIES and STOCKHOLDERS' EQUITY 1,561,900