On January 1, 20X7, Porter Company purchased 80% of the common stock of Singer Company for $372,000. On this date Singer had total owners' equity of $440,000. Any excess of cost over book value is due to goodwill. During 20X7 and 20X8, Porter has appropriately accounted for its investment in Singer using the simple equity method. On January 1, 20X8, Porter held merchandise acquired from Singer for $30,000. During 20X8, Singer sold merchandise to Porter for $90,000, of which $20,000 is held by Porter on December 31, 20X2. Singer's usual gross profit on affiliated sales is 40%. On December 31, 20X8, Porter still owes Singer $10,000 for merchandise acquired in December. 

On December 31, 20X7, Porter sold $100,000 par value of 10%, 10-year bonds for $102,000. Porter uses the straight-line method of amortization for the premium. The bonds pay interest semiannually on June 30 and December 31. On December 31, 20X8, Singer repurchased $50,000 par value of the bonds, paying $49,100. Straight-line amortization is used. 

Required: Complete the Figure 5-13 worksheet for consolidated financial statements for the year ended December 31, 20X8. Round all computations to the nearest dollar.

Figure 5-13
	Trial Balance		Eliminations and
	Porter	Singer	Adjustments
Account Titles	Company	Company	Debit		Credit
Inventory, December 3l	100,000	80,000
Other Current Assets	276,000	380,900
Investment in Sub. Company	460,000
Investment in Parent Bonds		49,100
Land	140,000	100,000
Buildings and Equipment	375,000	300,000
Accumulated Depreciation	(120,000)	(110,000)
Rent Receivable
Goodwill
Current Liabilities	(150,000)	(100,000)
Bonds Payable, 10%	(100,000)
Premium on Bonds Payable	(1,800)
Other Long-Term Liabilities	(200,000)	(150,000)
Common Stock – P Co.	(200,000)
Other Paid-in Capital – P Co.	(100,000)
Retained Earnings – P Co.	(379,000)
Common Stock – S Co.		(100,000)
Other Paid-in Capital – S Co.		(200,000)
Retained Earnings – S Co.		(200,000)
Net Sales	(580,000)	(500,000)
Cost of Goods Sold	350,000	300,000
Operating Expenses	130,000	125,000
Interest Income
Interest Expense	9,800
Subsidiary Income	(60,000)
Dividends Declared – P Co.	50,000
Dividends Declared – S Co.		25,000
Gain on Retirement of Bonds
Consolidated Net Income
To NCI
To Controlling Interest
Total NCI
Ret. Earn. Contr. Int. 12-31
	0	0
(continued)

	Consol.		Control.	Consol.
	Income		Retained	Balance
Account Titles	Statement	NCI	Earnings	Sheet
Inventory, December 3l
Other Current Assets
Investment in Sub. Company
Investment in Parent Bonds
Land
Buildings and Equipment
Accumulated Depreciation
Rent Receivable
Goodwill
Current Liabilities
Bonds Payable, 10%
Premium on Bonds Payable
Other Long-Term Liabilities
Common Stock – P Co.
Other Paid-in Capital – P Co.
Retained Earnings – P Co.
Common Stock – S Co.
Other Paid-in Capital – S Co.
Retained Earnings – S Co.
Net Sales
Cost of Goods Sold
Operating Expenses
Interest Income
Interest Expense
Subsidiary Income
Dividends Declared – P Co.
Dividends Declared – S Co.
Gain on Retirement of Bonds
Consolidated Net Income
To NCI
To Controlling Interest
Total NCI
Ret. Earn. Contr. Int. 12-31

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