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					                                                     Consolidation Worksheet
                                                     Parma Company Example #3--12/31/11

                                                      75% owned        Consolidation & Elimination Entries       Parma
            Description                 Parma          Saraceno         Dr.                         Cr.        Consolidated
Income Statement:
Revenue                                ($800,000)       ($300,000)                                              ($1,100,000)
COGS                                    $500,000         $240,000                                                  $740,000
Amortization expense                     $10,000                                                                    $10,000
Depreciation expense                     $20,000          $10,000                                                   $30,000
Equity in subsidiary earnings           ($37,500)                        $37,500      I                                  $0
            Net Income                 ($307,500)        ($50,000)       $37,500                                  ($320,000)
            NCI in Net Income                                            $12,500     N                              $12,500
            CI in Net Income                                              $50,000                                 ($307,500)

Statement of Retained Earnings:
Beginning retained earnings          ($11,500,000)                                                             ($11,500,000)
Net income                              ($307,500)       ($50,000)        $50,000 CF                              ($307,500)
Dividends                                 $40,000         $12,000                          N         $3,000         $40,000
                                                                                           D         $9,000
           Ending R/E                ($11,767,500)       ($38,000)        $50,000                   $12,000    ($11,767,500)

Balance Sheet:
Current assets                        $2,159,000         $348,000                                               $2,507,000
Investment in Saraceno                  $628,500                                           S       $600,000             $0
                                                                           $9,000    D     I        $37,500
Land                                 $15,000,000         $500,000                                              $15,500,000
Equipment, net                        $2,480,000          $90,000                                               $2,570,000
I/C Loan Recb.                          $100,000                                           P       $100,000             $0




           Total Assets              $20,367,500         $938,000          $9,000                  $737,500    $20,577,000

Liabilities                           ($3,000,000)                                                              ($3,000,000)
I/C Loan Payb.                                          ($100,000)       $100,000    P                                   $0
Common stock                            ($600,000)      ($200,000)       $200,000    S                            ($600,000)
Additional paid-in capital            ($5,000,000)      ($600,000)       $600,000    S                          ($5,000,000)
NCI in net assets of Saraceno                                                             S        $200,000       ($209,500)
                                                                                          N          $9,500
Retained earnings                    ($11,767,500)       ($38,000)        $50,000 CF      CF        $12,000    ($11,767,500)

           Total Liabilities & Eq.   ($20,367,500)      ($938,000)       $950,000                  $221,500    ($20,577,000)



Proof of debit and credit postings                                       $959,000                   $959,000

    S      Basic subsidiary shareholder equity elimination entry at the beginning of the year.
   IC     Intracompany rec./pay. elimination entry.
   IN     Intracompany income elimination entry.
   D      Elimination of intracompany dividends.
   N      Non-controlling interest consolidation entry.
   CF     Carry-forward from prior entries.

Consolidation entries on worksheet only:
          Consolidation Entry S:
                     Dr.       S-Co. Common Stock                   $200,000
                     Dr.       S-Co. APIC                           $600,000
                     Dr.       S-Co. R/E (beg. of year)                   $0
                               Cr.            P-Co. Investment in Saraceno                $600,000
                               Cr.            NCI in net assets of S-Co.                  $200,000

          Consolidation Entry IC:
                    Dr.        S-Co. I/C Payable                   $100,000
                               Cr.            P-Co. I/C Receivable                        $100,000

          Consolidation Entry IN:
                    Dr.        Equity in NI of S-Co.                  $37,500
                               Cr.              P-Co. Investment in Saraceno               $37,500

          Consolidation Entry D:
                    Dr.        P-Co. Investment in Saraceno         $9,000
                               Cr.           Intracompany dividends (S-Co. dividends)       $9,000

          Consolidation Entry N:
                    Dr.        NCI in net income of S-Co.             $12,500
                               Cr.             NCI in div. from S-Co. (S-Co. dividends)     $3,000
                               Cr.             NCI in net assets of S-Co.                   $9,500

				
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