b. woods chapter 04 electronic.doc
TRANSCRIPT
Consolidation Techniques and ProceduresChapter 4
PRIVATE
Chapter 4
Electronic Supplement Solutions
W-1 The method used by a parent company in accounting for its subsidiary can be determined by examining the separate financial statements of the parent company and the subsidiary. If the cost method is used, the parent company will report dividend income from the subsidiary and the investment account will be stated at original cost. If the equity method is used, the parent company will report investment income from the subsidiary, and the investment account will reflect subsidiary income since acquisition. When the equity method is used but the difference between investment cost and book value acquired has not been amortized on the parent company's books, the difference between the investment balance and underlying book value at any statement date will reflect the difference between the investment cost and underlying book value at the time of acquisition.
W-2 When the cost method is used, reciprocity between the investment account balance and the underlying subsidiary equity is established by adjusting the parent company's investment and retained earnings accounts for the parent's share of the change in subsidiary retained earnings between the dates the subsidiary was acquired and the beginning of the current year.
W-31Cost method
Cash
$30,000
Dividend income
$30,000
To record receipt of dividends ($40,000 x 75%).
2Cost method
Investment cost January 1, 2005
$300,000
Less: Dividends in excess of earnings ($30,000 - $10,000) x 75% (15,000)
Investment account balance - cost method
$285,0003Equity method
Investment in SBrain
$45,000
Income from SBrain
$45,000
To record share of SBrain's net income ($60,000 x 75%).
Cash
$30,000
Investment in SBrain
$30,000
To record receipt of dividends ($40,000 x 75%).
4Investment balance under equity method
Investment cost
$300,000
Add: Share of income for 2005 and 2006 ($70,000 x 75%)
52,500
Less: Share of dividends for 2005 and 2006 ($70,000 x 75%)
(52,500) Investment in SBrain balance December 31, 2006
$300,0005Consolidated net income
Pinky's separate income
$ 90,000
Add: Investment income
45,000 Consolidated net income
$134,000W-4 [AICPA adapted]
1a
Investment cost
$145,000
Add: Excess of book value acquired over cost
7,000Book value of 80% interest acquired
$152,000Book value of 100% interest ($152,000 80%)
$190,0002d
There is no way to determine the components of the subsidiary's stockholders' equity from the information given.
3d
The minority interest represents 20% of the current stockholders' equity of the subsidiary. Thus, total stockholders' equity must be $29,200 20%, or $146,000.
4d
There is no way to determine the components of the subsidiary's stockholders' equity from the information given.
5c
Consolidated - Parent = SubsidiaryCurrent assets
$363,000
$218,000 $145,000
Current liabilities
150,000
83,000 67,000Working capital
$213,000
$135,000 $ 78,000W-5Cost method
1aInvestment balance December 31, 2003 (original cost)
$160,0001bConsolidated net income under cost method
Net income of Photronic
$120,000
Less: Dividend income from Silicon ($25,000 x 80%)
(20,000)
Separate income of Photronic
100,000
Add: Photronic's share of Silicon's income ($60,000 x 80%) 48,000Consolidated net income
$148,000Equity method
2aInvestment in Silicon December 31, 2003
Cost January 1, 2003
$160,000
Add: Income from Silicon
48,000
Less: Dividends from Silicon
(20,000)
Investment in Silicon under equity method
$188,0002bConsolidated net income (equal to Phototronic's income) $120,0002cMinority interest December 31, 2003
Silicon's equity January 1, 2003
$200,000
Add: Net income
60,000
Deduct: Dividends
(25,000)
Silicon's equity at December 31, 2003
235,000
Minority interest percentage
20%Minority interest December 31, 2003
$ 47,000W-61Pane Company
Balance Sheet
at December 31, 2003
Assets
Liabilities and Stockholders' EquityCash
$ 2,500Liabilities
$ 80,000
Accounts receivable 15,000Stockholders' equity:
Other assets
120,000 Capital stock $100,000
Investment in Sizzle 88,000 Paid-in excess 10,000
Retained earnings 35,500 145,500Total assets
$225,500Total equities
$225,500
2Pane Company and Subsidiary
Consolidated Income Statement
for the year ended December 31, 2003
Sales
$190,000
Cost of goods sold
80,000
Gross profit
110,000
Operating expenses
65,000
Total consolidated net income
45,000
Less: Minority interest incomeb
4,000
Consolidated net income
$ 41,000b Minority interest income is 20% of Sizzle's $20,000 income.
3Pane Company and Subsidiary
Consolidated Balance Sheet
at December 31, 2003
Assets
Liabilities and Stockholders' EquityCash
$ 17,500Liabilities
$110,000
Accounts receivable 40,000Stockholders' equity:
Other assets
220,000 Capital stock $100,000
Goodwilla
8,000 Paid-in excess 10,000
Retained earningsb 43,500
Minority interestc 22,000 175,500Total assets
$285,500Total equities
$285,500
a (Cost $88,000 - book value acquired $80,000)
b Retained earnings-Pane January 1, 2003 of $22,500 plus consolidated net income of $41,000 less dividends of Pane of $20,000.
c Minority interest January 1, 2003 of $20,000 plus minority interest income of $4,000 less minority interest dividends of $2,000.
W-7
Prim Corporation and Subsidiary
Consolidation Working Papers
for the year ended December 31, 2003 | | | Adjustments and |Consolidated
| Prim | Stan 100% | Eliminations | Statements | | | | |
Income Statement | | | | |
Sales |$1,900,000 |$1,000,000 | | | $2,900,000 Income from Stan | 200,000 | |c 200,000| | Cost of sales | 800,000*| 400,000*| | | 1,200,000*Depreciation expense | 200,000*| 100,000*| | | 300,000*Interest expense | 200,000*| | | | 200,000*Operating expenses | 400,000*| 300,000*| | | 700,000*Net income |$ 500,000 |$ 200,000 | | | $ 500,000
| | | | |
Retained Earnings | | | | |
Retained earnings-Prim|$1,300,000 | | | | $1,300,000 Retained earnings-Stan| |$ 400,000 |d 400,000| |
Net income | 500,000| 200,000| | | 500,000 Dividends | 400,000*| 150,000*| |c 150,000| 400,000*Retained earnings | | | | |
December 31, 20X8 |$1,400,000 |$ 450,000 | | | $1,400,000 | | | | |
Balance Sheet | | | | |
Cash |$ 150,000 |$ 60,000 |a 10,000| | $ 220,000 Receivablesnet | 350,000 | 140,000 | |a 10,000| 480,000 Inventories | 1,000,000 | 150,000 | | | 1,150,000 Land | 600,000 | 100,000 | | | 700,000 Buildingsnet | 1,500,000 | 500,000 | | | 2,000,000 Equipmentnet | 1,900,000 | 800,000 | | | 2,700,000 Investment in Stan | 1,500,000 | | |b 50,000|
| | | |c 50,000|
| | | |d 1,400,000| Dividends receivable | | |b 50,000|e 50,000| |$7,000,000 |$1,750,000 | | | $7,250,000 | | | | |
Accounts payable |$ 400,000 |$ 250,000 | | | $ 650,000 Dividends payable | 100,000 | 50,000 |e 50,000| | 100,000 Bond interest payable | 100,000 | | | | 100,000 10% bonds payable | 2,000,000 | | | | 2,000,000 Common stock $10 par | 2,500,000 | 1,000,000 |d 1,000,000| | 2,500,000 Other paidin capital | 500,000 | | | | 500,000 Retained earnings | 1,400,000| 450,000| | | 1,400,000 |$7,000,000 |$1,750,000 | | | $7,250,000 | | | | | *Deduct
W-8Preliminary computationsInvestment cost
$100,000
Book value acquired ($100,000 x 70%)
70,000 Excess cost over book value acquired
$ 30,000Excess allocated to:
Inventories (sold in 2006)
$ 10,000
Patents (amortized over 10 years at $2,000 per year)
20,000 Excess cost over book value acquired
$ 30,000Conversion to equity method
Retained Investment Income
Earnings-Phil in Simm from SimmPrior-year effectExcess allocated to inventory $(10,000) $(10,000)
Patent amortization 2006 and 2007 (4,000) (4,000)
Current-year effectPatent amortization (2,000) $(2,000)
Adjustment $(14,000) $(16,000) $(2,000)
Working paper entries in journal formaIncome from Simm
$ 2,000
Retained earnings-Phil
14,000
Investment in Simm
$ 16,000
To correct investment income, the investment in Simm account and retained earnings for amortization of cost-book value differentials.
bIncome from Simm
$ 19,000
Dividends
$ 14,000
Investment in Simm
5,000
To eliminate income and dividends from Simm and return the investment account to its beginning-of-the-period balance.
cRetained earnings-Simm
$ 40,000
Capital stock-Simm
80,000
Patents
16,000
Investment in Simm
$100,000
Minority interest December 31, 2007
36,000
To eliminate reciprocal equity and investment balances, establish beginning minority interest, and enter unamortized patents.
dOther expenses
$ 2,000
Patents
$ 2,000
To enter current patent amortization.
e Minority Interest Expense
$ 9,000
Dividends-Simm
$ 6,000
Minority Interest
3,000
To enter minority interest share of subsidiary income and dividends
W-8 (continued)Conversion to equity as first working paper entry:
Phil Corporation and Subsidiary
Consolidation Working Papers
for the year ended December 31, 2008
___________________________________________________________________________
| | | Adjustments and |Consolidated
| Pitt |Simm 80% | Eliminations |Statements__ | | | | |
Income Statement | | | | |
Sales |$500,000 |$100,000 | | |$600,000 Income from Simm | 21,000 | |a 2,000| |
| | |b 19,000| | Cost of sales | 240,000*| 40,000*| | | 280,000* Other expenses | 174,000*| 30,000*|d 2,000| | 206,000* Minority expense | | |e 9,000| | 9,000* Net income |$107,000 |$ 30,000 | | |$105,000 | | | | |
Retained Earnings | | | | |
Retained earningsPhil|$110,000 | |a 14,000| |$ 96,000 Retained earningsSimm| |$ 40,000 |c 40,000| | Net income | 107,000| 30,000| | 105,000 Dividends | 70,000*| 20,000*| |b 14,000|
|e 6,000 | 70,000* Retained earnings | | | | |
December 31, 2008 |$147,000 |$ 50,000 | | |$131,000 | | | | |
Balance Sheet | | | | |
Cash |$ 56,000 |$ 30,000 | | |$ 86,000 Accounts receivable | 40,000 | 20,000 | | | 60,000 Inventories | 60,000 | 15,000 | | | 75,000 Plant assetsnet | 220,000 | 105,000 | | | 325,000 Investment in Simm | 121,000 | | |a 16,000|
| | | |b 5,000|
| | | |c 100,000| Patents | | |c 16,000|d 2,000| 14,000 |$497,000 |$170,000 | | |$560,000 | | | | |
Accounts payable |$ 50,000 |$ 40,000 | | |$ 90,000 Capital stock | 300,000 | 80,000 |c 80,000 | | 300,000 Retained earnings | 147,000| 50,000| | | 131,000 |$497,000 |$170,000 | | | Minority interest January 1, 2008 | |c 36,000| Minority interest December 31, 2008 | |e 3,000| 39,000 | | |$560,000 | | | | *Deduct
W-8 (continued)
Alternative solution - no initial conversion to equityWorking paper entries in journal formaIncome from Simm
$ 21,000
Dividends
$ 14,000
Investment in Simm
7,000
To establish reciprocity as of the beginning of the period. [This entry eliminates the investment increase for 2008 as it was reported in Phil's books against the dividends received from Simm, and credits the investment account for the difference. The investment account balance is now the beginning-of-the-period balance.]
bRetained earnings-Phil
$ 10,000
Capital stock-Simm
80,000
Retained earnings-Simm
40,000
Patents
20,000
Investment in Simm
$114,000
Minority interest January 1, 2008
36,000
To eliminate reciprocal investment and equity amounts, establish beginning minority interest, enter the original patents, and charge Pitt's retained earnings for the excess allocated to inventories.
cRetained earnings-Phil
$ 4,000
Other expenses
2,000
Patents
$ 6,000
To enter the current year's patent amortization and charge Phil's retained earnings for patent amortization for 2006 and 2007.
dMinority Interest Expense
$ 9,000
Dividends-Simm
$ 6,000
Minority Interest
3,000
To enter minority interest share of subsidiary income and dividends
W-8 (continued)
Alternative solution - no initial conversion to equity
Phil Corporation and Subsidiary
Consolidation Working Papers
for the year ended December 31, 2008
___________________________________________________________________________
| | | Adjustments and |Consolidated
| Pitt |Simm 80% | Eliminations |Statements__ | | | | |
Income Statement | | | | |
Sales |$500,000 |$100,000 | | | $600,000 Income from Simm | 21,000 | |a 21,000| | Cost of sales | 240,000*| 40,000*| | | 280,000* Other expenses | 174,000*| 30,000*|c 2,000| | 206,000* Minority expense | | |d 9,000| | 9,000* Net income |$107,000 |$ 30,000 | | | $105,000 | | | | |
Retained Earnings | | | | |
Retained earningsPhil|$110,000 | |b 10,000| |
| | |c 4,000| | $ 96,000
Retained earningsSimm| |$ 40,000 |b 40,000| | Net income | 107,000| 30,000| | | 105,000 Dividends | 70,000*| 20,000*| |a 14,000|
|d 6,000| 70,000* Retained earnings | | | | |
December 31, 20X8 |$147,000 |$ 50,000 | | | $131,000 | | | | |
Balance Sheet | | | | |
Cash |$ 56,000 |$ 30,000 | | | $ 86,000 Accounts receivable | 40,000 | 20,000 | | | 60,000 Inventories | 60,000 | 15,000 | | | 75,000 Plant assetsnet | 220,000 | 105,000 | | | 325,000 Investment in Simm | 121,000 | | |a 7,000|
| | | |b 114,000| Patents | | |b 20,000|c 6,000| 14,000 |$497,000 |$170,000 | | | $560,000 | | | | |
Accounts payable |$ 50,000 |$ 40,000 | | | $ 90,000 Capital stock | 300,000 | 80,000 |b 80,000| | 300,000 Retained earnings | 147,000| 50,000| | | 131,000 |$497,000 |$170,000 | | | Minority interest January 1, 2008 | |b 36,000| Minority interest December 31, 2008 | |d 3,000| 39,000 | | | $560,000 | | | | *Deduct
W-9
Supporting computationsInvestment cost January 1, 2005
$200,000
Book value acquired ($225,000 x 60%)
135,000 Excess cost over book value
$ 65,000Excess allocated to:
Machinery ($50,000 undervaluation x 60%)
$ 30,000
Remainder to patents
35,000 Excess cost over book value
$ 65,000 Amortization Unamortized at
2005 2006 December 31, 2006Machinery $30,000/4 years $7,500 $7,500 $15,000
Patents $35,000/10 years 3,500 3,500 28,000
Consolidated net income:
Puff's separate income ($116,000 - $6,000 dividends from Scot) $110,000
Add: Income from Scot ($60,000 x 60%) - $11,000 amortization 25,000 Consolidated net income
$135,000Investment in Scot (equity basis):
Investment cost January 1, 2005
$200,000
Share of retained earnings increase for 2005
($50,000 - $25,000) x 60%
15,000
Less: Amortization for 2005
(11,000)
Investment in Scot December 31, 2005*
204,000
Share of Scot's income for 2006 ($60,000 x 60%)
36,000
Less: Amortization for 2006
(11,000)
Less: Dividends for 2006 ($20,000 x 60%)
(12,000)
Investment in Scot December 31, 2006 (under the equity method) $217,000*On December 31, 2005 the investment in Scot is $204,000 on an equity basis and $200,000 on the cost basis. The $4,000 difference is the result of applying the cost rather than the equity method in 2005. A working paper entry for $4,000 is needed to increase the investment in Scot and the beginning retained earnings of Puff to an equity basis. This working paper entry adjusts Puff's beginning retained earnings of $112,000 to $116,000, the correct amount of beginning consolidated retained earnings.
W-9 (continued)
Working paper entries in general journal form:
aDividends receivable
$ 6,000
Dividends from Scot
$ 6,000
Error correction -- dividends declared but not recorded by Puff.
bDividends from Scot
$ 12,000
Dividends
$ 12,000
Error correction from using the cost method.
cInvestment in Scot
$ 4,000
Retained earnings-Puff
$ 4,000
To record equity in retained earnings increase of $15,000 from 2005 less $7,500 depreciation and less $3,500 patent amortization.
dRetained earnings-Scot
$ 50,000
Capital stock-Scot
200,000
Plant and equipment-net
22,500
Patents
31,500
Investment in Scot
$204,000
Minority interest
100,000
To eliminate reciprocal equity and investment balances and enter patents, excess allocated to plant and equipment, and beginning minority interest.
eOperating expenses
$ 7,500
Plant and equipment-net
$ 7,500
To record depreciation on excess allocated to plant and equipment.
fOperating expenses
$ 3,500
Patents
$ 3,500
To record amortization on excess allocated to patents.
gDividends payable
$ 6,000
Dividends receivable
$ 6,000
To eliminate reciprocal balances.
hAccounts payable
$ 5,000
Accounts receivable
$ 5,000
To eliminate reciprocal balances.
iMinority Interest Expense
$ 24,000
Dividends-Scot
$ 8,000
Minority Interest
16,000
To enter minority interest share of subsidiary income and dividends
W-9 (continued)
Puff Corporation and Subsidiary
Consolidation Working Papers
for the year ended December 31, 2006
| | | Adjustments and |Consolidated
| Puff |Scot 80% | Eliminations | Statements Income Statement | | | | |
Net sales |$900,000 |$300,000 | | | $1,200,000 Dividends from Scot | 6,000 | |b 12,000|a 6,000| Cost of goods sold | 600,000*| 150,000*| | | 750,000* Operating expenses | 190,000*| 90,000*|e 7,500| |
| | |f 3,500| | 291,000* Minority expense | | |i 24,000| | 24,000* Net income |$116,000 |$ 60,000 | | | $ 135,000 | | | | |
Retained Earnings | | | | |
Retained earningsPuff|$112,000 | | |c 4,000| $ 116,000 Retained earningsScot| |$ 50,000 |d 50,000| | Net income | 116,000| 60,000| | | 135,000 Dividends | 100,000*| 20,000*| |b 12,000|
|i 8,000| 100,000* Retained earnings | | | | |
December 31, 20X6 |$128,000 |$ 90,000 | | |$ 151,000 | | | | |
Balance Sheet | | | | |
Cash | 26,000 | 15,000 | | |$ 41,000 Accounts receivable | 26,000 | 20,000 | |h 5,000| 41,000 Inventories | 82,000 | 60,000 | | | 142,000 Other current assets | 80,000 | 5,000 | | | 85,000 Land | 160,000 | 30,000 | | | 190,000 Plant and | | | | |
equipmentnet | 340,000 | 230,000 |d 22,500|e 7,500| 585,000 Investment in Scot | 200,000 | |c 4,000|d 204,000| Dividends receivable | | |a 6,000|g 6,000| Patents | | |d 31,500|f 3,500| 28,000 |$914,000 |$360,000 | | |$1,112,000 | | | | |
Accounts payable |$ 24,000 |$ 15,000 |h 5,000| |$ 34,000 Dividends payable | | 10,000 |g 6,000| | 4,000 Other liabilities | 62,000 | 45,000 | | | 107,000 Capital stock | 700,000 | 200,000 |d 200,000| | 700,000 Retained earnings | 128,000| 90,000| | | 151,000 |$914,000 |$360,000 | | |
Minority interest January 1, 2006 | |d 100,000| Minority interest December 31,2006 | |i 16,000| 116,000 | | |$1,112,000 | | | | *Deduct
W-10Preliminary computationsCost-book value differential:
Investment cost July 1, 2003
$102,450
Book value acquired ($71,000 x 95%)
67,450 Excess cost over book value acquired
$ 35,000Allocation and amortization schedule:
Amortization Unamortized
Allocation 2003 - 2005 June 30, 2006Plant and equipment (5-year life) $15,000 $ 9,000 $ 6,000
Patents (amortized over 10 years) 20,000 6,000 14,000 $35,000 $15,000 $20,000Minority interest expense ($62,000 x 5%)
$ 3,100Pappa Bee's income from Sue Bee:
Share of reported income ($62,000 x 95%)
$ 58,900
Less: Amortization for year
5,000 Income from Sue Bee
$ 53,900Consolidated net income:
Pappa Bee's separate income ($115,000 - $57,000 dividend income) $ 58,000
Add: Income from Sue Bee
53,900 Consolidated net income
$111,9001Cost-to-Equity Conversion Schedule
Retained Investment Income Dividend Earnings in Sue from Sue Income Prior years' effect95% of Sue Bee's change in
retained earnings
($81,000 - $21,000 x 95%) $57,000 $57,000
Amortization of excess:
Plant and equipment (9,000) (9,000)
Patents (6,000) (6,000)
Current year's effectReclassify dividend income
as a decrease in the
investment account (57,000) $(57,000)
Equity in Sue Bee's reported
income 58,900 $58,900
Less: Amortization (5,000) (5,000) $42,000 $38,900 $53,900 $(57,000)
W-10 (continued)
aDividend income
$ 57,000
Investment in SueBee
38,900
Retained earnings-Pappa Bee
$ 42,000
Income from Sue Bee
53,900
To convert Pappa Bee's investment from cost to equity as explained in the conversion to equity schedule.
bIncome from Sue Bee
$ 53,900
Investment in SueBee
3,100
Dividends
$ 57,000
To eliminate income and dividends and return the investment account to its beginning-of-the-period balance.
cRetained earnings-Sue Bee
$ 81,000
Unamortized excess
20,000
Capital stock-SueBee
50,000
Investment in SueBee
$144,450
Minority interest
6,550
To eliminate reciprocal equity and investment balances, and enter the unamortized excess and beginning minority interest.
dPlant and equipment
$ 15,000
Patents
14,000
Accumulated depreciation
$ 9,000
Unamortized excess
20,000
To allocate the unamortized excess as of June 30, 2006.
eOther expenses
$ 5,000
Accumulated depreciation
$ 3,000
Patents
2,000
To enter current amortization of excess.
fNote payable-8%
$100,000
Note receivable
$100,000
To eliminate reciprocal note receivable and payable amounts.
gInterest payable
$ 4,000
Interest receivable
$ 4,000
To eliminate reciprocal interest receivable and payable amounts.
hInterest income
$ 8,000
Interest expense
$ 8,000
To eliminate reciprocal interest income and expense amounts.
iDividends payable
$ 14,250
Dividends receivable
$ 14,250
To eliminate reciprocal dividends receivable and payable amounts.
jMinority Interest Expense
$ 3,100
Dividends-Scot
$ 3,000
Minority Interest
100
To enter minority interest share of subsidiary income and dividends
W-10 (continued)
Pappa Bee Industries and Subsidiary
Consolidation Working Papers
for the year ended June 30, 2007
| | | Adjustments and |Consolidated
|Pappa Bee| Sue Bee | Eliminations | Statements | | | | |
Income Statement | | | | |
Sales |$500,000 |$250,000 | | | $750,000 Dividend income | 57,000 | |a 57,000| | Income from Sue Bee | | |b 53,900|a 53,900| Interest income | 8,000 | |h 8,000| | Cost of sales | 300,000*| 120,000*| | | 420,000* Interest expense | | 8,000*| |h 8,000 | Other expenses | 150,000*| 60,000*|e 5,000 | | 215,000* Minority expense | | |j 3,100 | | 3,100*
Net income |$115,000 |$ 62,000 | | | $111,900 | | | | |
Retained Earnings | | | | |
Retained earnings | | | | |
-Pappa Bee |$148,000 | | |a 42,000 $190,000
-Sue Bee | |$ 81,000 |c 81,000 | |
Net income | 115,000| 62,000| | | 111,900 Dividends | 50,000*| 60,000*| |b 57,000|
|j 3,000 | 50,000* Retained earnings | | | | |
June 30, 20X5 |$213,000 |$ 83,000 | | | $251,900 | | | | |
Balance Sheet | | | | |
Cash |$ 69,300 |$ 22,000 | | | $ 91,300 Accounts receivable | 60,000 | 30,000 | | | 90,000 Interest receivable | 4,000 | | |g 4,000| Dividends receivable | 14,250 | | |i 14,250| Other assets | 100,000 | 75,000 | | | 175,000 Plant and equipment | 300,000 | 200,000 |d 15,000| | 515,000 Accumulated | | | |d 9,000|
depreciation | 72,000*| 50,000*| |e 3,000| 134,000* Investment in Sue Bee | 102,450 | |a 38,900|c 144,450|
| | |b 3,100| | Note receivable | 100,000 | | |f 100,000| Patents | | |d 14,000|e 2,000| 12,000 Unamortized excess | | |c 20,000|d 20,000| |$678,000 |$277,000 | | | $749,300 | | | | |
Accounts payable |$ 40,000 |$ 25,000 | | | $ 65,000 Dividends payable | 25,000 | 15,000 |i 14,250| | 25,750 Interest payable | | 4,000 |g 4,000| | Note payable8% | | 100,000 |f 100,000| | Capital stock | 400,000 | 50,000 |c 50,000| | 400,000 Retained earnings | 213,000| 83,000| | | 251,900 |$678,000 |$277,000 | | | Minority interest June 30, 2006 | |c 6,550| Minority interest June 30, 2007 | |j 100| 6,650 | | | $749,300 | | | *Deduct