SOAL 1

Condensed financial data of Popler Company appear below:

POPLER COMPANY
Comparative Statements of Financial Position
December 31
2017 2016
Assets

Plant assets $315,000 $250,000

Accumulated depreciation (65,000) (60,000)
Investments 90,000 75,000
Prepaid expenses 19,000 25,000
Inventories 120,000 132,000
Accounts receivable 85,000 53,000
Cash 71,000 35,000
Total $635,000 $510,000

Equity and Liabilities

Share capital-ordinary $245,000 $170,000

Retained earnings 138,000 81,000
Bonds payable 130,000 160,000
Accounts payable 93,000 75,000
Accrued expenses payable 29,000 24,000
Total $635,000 $510,000

POPLER COMPANY
Income Statement
For the Year Ended December 31, 2017
Sales revenue $470,000
Less:
Cost of goods sold $280,000
Operating expenses (excluding depreciation) 60,000
Interest expense 18,000
Depreciation expense 17,000
Income taxes 15,000
Loss on sale of plant assets 3,000 393,000
Net income $ 77,000

Additional information:
1. New plant assets costing $90,000 were purchased for cash in 2017.
2. Old plant assets costing $25,000 were sold for $10,000 cash when book value was $13,000.
3. Bonds with a face value of $30,000 were converted into $30,000 of ordinary shares.
4. A cash dividend of $20,000 was declared and paid during the year.
5. Accounts payable pertain to merchandise purchases.
Instructions
Prepare a statement of cash flows for the year using the direct method and Indirect Method
Prepare a Financial Statement Analysis : Horizontal,Vertical and Ratios.
SOAL 2
On January 2, 2017, Pine Company purchased 100% of the outstanding common shares of
Seely Company for $520,000. Any excess of cost over the book value of the net assets of Seely
company should first be allocated to land $55,000, and Buildings $40,000 and any remainder to
Goodwill.
Instructions
(a) Complete the following worksheet below for preparing a consolidated statement of financial
position on the date of acquisition. You may add accounts to the worksheet that may be
necessary.
(b) Prepare a consolidated statement of financial position for Pine Company and Subsidiary on
January 2, 2017.
PINE COMPANY AND SUBSIDIARY
Worksheet—Consolidated Statement of Financial Position
January 2, 2017 (Acquisition Date)
Pine Seely Eliminations Consolidated
Company Company Debits Credits Data
Assets
Land 20,000 150,000
Buildings (net) 150,000 250,000
Investment in Seely
ordinary shares 520,000
Current assets 120,000 70,000

Totals 810,000 470,000

Liabilities and Equity
Share capital—Pine 500,000
Share capital—Seely 270,000
Retained earnings—Pine 250,000
Retained earnings—Seely 130,000
Current liabilities 60,000 70,000

Totals 810,000 470,000

SOAL 3
Presented below are two independent situations.

1. Grand Cosmetics acquired 10% of the 200,000 ordinary shares of Cey Fashion at a total
cost of $12 per share on March 18, 2017. On June 30, Cey declared and paid a $60,000
dividend. On December 31, Cey reported net income of $110,000 for the year. At
December 31, the market price of Cey Fashion was $15 per share. The shares are
classified as non-trading.
2. Unruh, Inc., obtained significant influence over Olsen Corporation by buying 25% of
Olsen's 40,000 outstanding ordinary shares at a total cost of $7 per share on January 1,
2017. On June 15, Olsen declared and paid a cash dividend of $30,000. On December
31, Olsen reported a net income of $80,000 for the year.

Instructions
Prepare all the necessary journal entries for 2017 for (a) Grand Cosmetics and (b) Unruh, Inc.

SOAL 4
At December 31, 2017, the non-trading securities for Milner, Inc. are as follows.

Security Cost Fair Value

X $27,500 $23,000
Y 12,500 14,000
Z 23,000 19,000
$63,000 $ 56,000

Instructions
(a) Prepare the adjusting entry at December 31, 2017, to report the securities at fair value.
(b) Show the statement of financial position and income statement presentation at December
31, 2017, after adjustment to fair value. The securities are considered to be a long-term
investment.