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Year 10 Financial Summary for P and S Companies

The document shows financial information for Company P and Company S for Year 10. It includes items such as sales, expenses, net income, bonds payable, and intercompany transactions. Company P had net income of $328,063 and Company S had net income of $134,710. It also records bonds payable for each company and the amortization of discounts on those bonds throughout the year. Intercompany revenue, expenses, and profits between the two companies are presented as well.

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Nguyen
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22 views5 pages

Year 10 Financial Summary for P and S Companies

The document shows financial information for Company P and Company S for Year 10. It includes items such as sales, expenses, net income, bonds payable, and intercompany transactions. Company P had net income of $328,063 and Company S had net income of $134,710. It also records bonds payable for each company and the amortization of discounts on those bonds throughout the year. Intercompany revenue, expenses, and profits between the two companies are presented as well.

Uploaded by

Nguyen
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Year 10 P Company S Company

Sales 687,000 416,000


Interest Income 2,000
Equity Method Income 125,763
Gain on sale of land 7,000

total Revenues 819,763 418,000

Cost of Sales 412,200 249,600


Interest Expense 16,500
Selling and Admin 48,000 24,000
Inocme Tax 15,000 9,690

Expense 491,700 283,290

Net Income 328,063 134,710

BONDS PAYABLE
P Company
Bond Payable 195,000

Issued bonds at Jan1 Year 3 200,000

Discount Jan 1, Year 3 5,000

Amortization - Yr 3 thru 9 3,500


Amortization - to July 1 250 1,250

Balance of Bond July 1 198,750


Amort of Bond from July 1 to Dec 31 250
Balance of Bond Dec 31 Year 10 199,000

S Company - Investment in Bonds 38,000

Par Value of Bonds Purchased on July 1 40,000


Bond purchase discount 2,000
Amortization of Discount Year 10 (400) 1,600

Balance Dec 31 Year 10 38,400

Realize gain on Bond B4 tax 2,000


Carrying Amount on Company P 20% 39,750
Realized loss on Bonds - Company P b4 tax 250

Net Realized Gain for the Bond 1,750

INTERCOMPANY REVENUE AND EXPENSES

INTERCOMPANY PROFITS

EQUITY METHOD INCOME


Before Tax
Consolidated Entity
Realized Gain 1,750
Int elim Gain (350)
Balance Gain Dec 31 Year 10 1,400

P Company
Realized Loss for 1/2 Year 10 (250)
Interest Elimination 50
Balance Gain Dec 31 Year 10 (200)

Eliminate S Company
Realized Gain 2,000
Interest elimination (400)
Balance Gain Dec 31 Year 10 1,600

Reverse less tax


Include this
Tax After Tax
40%
700 1,050
(140) (210)
560 840

(100) (150)
20 30
(80) (120)

800 1,200
(160) (240)
640 960

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