Problem 7-15 Part A
Problem 7-15 Part A
Problem 7-15 Part A
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Problem 7-15 (continued)
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Problem 7-15 (continued)
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Part B
(3) No workpaper entries are necessary for 2010 and later years. As of December 31, 2009, the
amount of profit recorded by the affiliates on their books [$120,000 - $12,000 = $108,000] is equal
to the amount of profit considered realized in the consolidated financial statements
[$8,000 + $8,000 + $92,000 = $108,000].
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Problem 7-16
Part A PRATHER COMPANY AND SUBSIDIARY
Consolidated Statements Workpaper
For the Year Ended December 31, 2009
Net Income from above 627,000 300,000 252,000 15,000 63,000 627,000
Dividends Declared
Prather Company (150,000) (150,000)
Stone Company (75,000) (1) 60,000 (15,000)
12/31 Retained Earnings
to Balance Sheet 1,874,400 1,263,000 1,290,000 75,000 48,000 1,874,400
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Problem 7-16 (continued)
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Intercompany Sale of Equipment
Accumulated Remaining
Cost Depreciation Carrying Value Life Depreciation
Original Cost $1,350,000 $540,000 $810,000 10 yr $81,000
Intercompany Selling Price 960,000 _______ 960,000 10 yr 96,000
Difference $ 390,000 $540,000 $150,000 $15,000
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