Consolidated balance sheets (parent company and entity theories)
The adjusted trial balances of Pin Corporation and its 80 percent owned subsidiary, Son Corporation, at December 31, 2012, are as follows (in thousands):
|
Pin |
Son |
|
|
Cash |
$ 32 |
$ 20 |
|
Receivables—net |
120 |
180 |
|
Inventories |
300 |
150 |
|
Plant assets—net |
1,200 |
750 |
|
Investment in Son |
752 |
— |
|
Cost of sales |
1,300 |
600 |
|
Depreciation |
225 |
75 |
|
Other expenses |
271 |
175 |
|
Dividends |
200 |
50 |
|
$4,400 |
$2,000 |
|
|
Accounts payable |
$ 204 |
$ 100 |
|
Other liabilities |
300 |
200 |
|
Capital stock |
1,000 |
500 |
|
Retained earnings |
800 |
200 |
|
Sales |
2,000 |
1,000 |
|
Income from Son |
96 |
— |
|
$4,400 |
$2,000 |
Pin acquired its interest in Son for $640,000 on January 1, 2011, when Son’s stockholders’ equity consisted of $500,000 capital stock and $100,000 retained earnings. The excess cost was due to a $100,000 undervaluation of plant assets with a 5 year remaining useful life and to previously unrecorded patents with a 10 year amortization period. Pin uses a one line consolidation in accounting for its investment in Son.
REQUIRED: Prepare comparative consolidated balance sheets at December 31, 2012, for Pin Corporation and Subsidiary under (a) parent company theory and (b) entity theory.