Consolidated income statement (mid year purchase of additional interest)
Comparative separate company and consolidated balance sheets for Pod Corporation and its 70 percent owned subsidiary, Saw Corporation, at year end 2011 were as follows (in thousands):
|
Pod |
Saw |
Consolidated |
|
|
Cash |
$ 100 |
$ 70 |
$ 170 |
|
Inventories |
800 |
100 |
900 |
|
Other current assets |
500 |
130 |
630 |
|
Plant assets—net |
3,500 |
800 |
4,300 |
|
Investment in Saw |
600 |
— |
— |
|
Goodwill |
— |
— |
40 |
|
Total assets |
$5,500 |
$1,100 |
$6,040 |
|
Current liabilities |
$ 500 |
$ 300 |
$ 800 |
|
Capital stock, $10 par |
3,000 |
500 |
3,000 |
|
Other paid in capital |
1,000 |
100 |
1,000 |
|
Retained earnings |
1,000 |
200 |
1,000 |
|
Noncontrolling interest |
— |
— |
240 |
|
Total equities |
$5,500 |
$1,100 |
$6,040 |
Saw’s net income for 2012 was $150,000, and its dividends for the year were $80,000 ($40,000 on March 1, and $40,000 on September 1). On April 1, 2012, Pod increased its interest in Saw to 80 percent by purchasing 5,000 shares in the market at $19 per share.
Separate incomes of Pod and Saw for 2012 are computed as follows:
|
Pod |
Saw |
|
|
Sales |
$2,000 |
$1,200 |
|
Cost of sales |
(1,200 ) |
(700 ) |
|
Gross profit |
800 |
500 |
|
Depreciation expense |
(400) |
(300) |
|
Other expenses |
(100 ) |
(50 ) |
|
Separate incomes |
$ 300 |
$ 150 |
REQUIRED
1. Prepare a consolidated income statement for the year ended December 31, 2012.
2. Prepare a schedule to show how Saw’s net income and dividends for 2012 are allocated among noncontrolling interests, controlling interests, and other interests.