[kendrajac]

Trial Balance
Parent Sub
Inventory, Dec 31 $100,000 $105,000
Other Current Assets $207,000 $325,000
Investment in Sub Co. $710,000



Land $140,000 $80,000
Buildings and Equipment $315,000 $340,000
Accum. Depreciation $(220,000) $(130,000)
Patent $20,000

Current Liabilities $(150,000) $(70,000)
Bonds Payable $(100,000)
Other Long-Term Liab. $(200,000) $(40,000)

Common Stock - P Co. $(200,000)
Other Paid in Capital - P Co.$(100,000)
Retained Earnings - P Co,$(492,000)


Common Stock - S Co. $(150,000)
Other Paid in Capital - S Co.$(100,000)
Retained Earnings - S Co. $(200,000)


Net Sales $(600,000) $(380,000)
COGS $360,000 $228,000

Operating Expenses $140,000 $62,000

Subsidiary Income $(90,000)
Dividends Declared - P Co $60,000
Dividends Declared - S Co. $30,000
Consolidated Net Income
NCI
Controlling Interest
Total NCI
Ret Earn. Contr. Int 12-31
Total


On January 1, 20X1, Prange Company acquired 100% of the common stock of Seaman Company for $600,000. On this date Seaman had total owners' equity of $400,000. Any excess of cost over book value is attributable to a patent, which is to be amortized over 10 years.

During 20X1 and 20X2, Prange has appropriately accounted for its investment in Seaman using the simple equity method.

On January 1, 20X2, Prange held merchandise acquired from Seaman for $30,000. During 20X2, Seaman sold merchandise to Prange for $100,000, of which $20,000 is held by Prange on December 31, 20X2. Seaman's gross profit on all sales is 40%.

On December 31, 20X2, Prange still owes Seaman $20,000 for merchandise acquired in December.


What is controlled retained earnings? What is consolidated Net Income?