Slide AKT 307 AKL 1 10
10-1
Baker / Lembke / King
Additional
Consolidation
Reporting
Issues
McGraw-Hill/ Irwin
10
Electronic Presentation by
Douglas Cloud
Pepperdine University
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidated Statement of Cash Flows
• Prepared after Consolidated I/S, R/E and B/S.
• Steps:
– Adjustment of consolidated NI (depreciation and
amortization resulting from write-off of
differentials)
– Eliminating transfers between affiliates: sale or
purchase of assets, unrealized profit of
intercompany sales
– Non-controlling interest: income is deducted;
receipts and payments
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-2
Consolidated Income Statement, 20X2
PT Induk and Subsidiary
Consolidated Income Statement
For the Year Ended December 31, 20X2
Sales
Gain on Sale of Land
Rp720,000,000
30,000,000
Rp750,000,000
Less: Cost of Goods Sold
Rp340,000,000
Depreciation Expense
76,800,000
Other Expenses
105,000,000
Income Available to All Shareholders
Income to Noncontrolling Interest
Consolidated Net Income
McGraw-Hill/ Irwin
-521800,000
Rp228,200,000
-15,000,000
Rp213,200,000
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-3
Consolidated Cash Flows Statement, 20X2
PT Induk and Subsidiary
Consolidated Statement of Cash Flows
For the Year Ended December 31, 20X2
Cash Flows from Operating Activities:
Top
Consolidated Net Income
Rp213,200,000
Top
Noncash Expenses, Revenues, Losses,
portion
portion
and Gains included in Income:
Depreciation Expense
76,800,000
Income to Noncontrolling
Interest
15,000,000
Gain on Sale of Land
-30,000,000
Increase in Accounts Receivable
-105,000,000
Increase in Inventory
-95,000,000
Increase in Accounts Payable
30,000,000
Net Cash Provided by Operating
Activities
Rpl05,000,000
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-4
Consolidated Cash Flows Statement, 20X2
PT Induk and Subsidiary
Consolidated Statement of Cash Flows
For the Year Ended December 31, 20X2
Cash Flows from Investing Activities:
Acquisition of Equipment
-Rp100,000,000
Sale of Land
70,000,000
Net Cash Used in Investing Activities
-Rp 30,000,000
Cash Flows from Financing Activities:
Dividends Paid:
To Parent Company Shareholders -Rp 60,000,000
To Noncontrolling Shareholders
-8,000,000
Net Cash Used in Financing Activities
-68,000,000
Net Increase in Cash
Rp 7,000,000
Bottom
Bottomportion
portion
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-5
Consolidation Following an Interim Purchase
The results of operations for a subsidiary purchased
during the fiscal period are included in the consolidated
income statement in one of two ways:
Include
Include in
in the
theconsolidated
consolidated income
incomestatement
statement the
the
revenue
revenue and
and expenses
expenses of
of the
the subsidiary
subsidiary as
as ififitit had
had
been
been acquired
acquired at
at the
the beginning
beginning of
ofthe
the fiscal
fiscal period,
period,
and
and deduct
deduct the
the parent’s
parent’s share
shareof
ofthe
thesubsidiary’s
subsidiary’s
preacquisition
preacquisition earnings
earnings at
at the
the bottom
bottomof
of the
the
consolidated
consolidatedincome
incomestatement.
statement.
Include
Include in
in the
theconsolidated
consolidated income
incomestatement
statement only
only
the
the subsidiary’s
subsidiary’s revenue
revenue earned
earned and
and expenses
expenses
incurred
incurred subsequent
subsequent to
to the
the date
date of
of combination.
combination.
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-6
10-7
Consolidation Following an Interim Acquisition
On
OnJuly
July1,
1,20X1,
20X1,PT
PTInduk
Indukpurchases
purchases80
80percent
percentof
of
the
thecommon
commonstock
stockof
ofPT
PTAnak
Anakfor
forits
itsunderlying
underlying
book
bookvalue
valueof
ofRp246,400,000.
Rp246,400,000.
Book value of PT Anak on January 1, 20X1:
Common stock
Retained earnings
Rp200,000,000
100,000,000
Rp300,000,000
Net income, January 1 to June 30, 20X1
20,000,000
Dividends, January 1 to June 30, 20X1
-12,000,000
Book value of PT Anak on July 1, 20X1
Rp308,000,000
PT Induk’s ownership interest
x
.80
Book value on July 1, 20X1, of shares acquired Rp246,400 ,000
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidation Following an Interim Purchase
10-8
The ownership situation on July 1, 20X1, is as follows:
P
7/1/X1
80%
S
20%
McGraw-Hill/ Irwin
Cost of investment
Rp246,400,000
Book value (7/1/X1)
Common stock-PT Anak
Rp200,000,000
Retained earnings-PT Anak
108,000,000
Rp308,000,000
PT Induk’s share
x
.80 -246,400,000
NCI Differential
Rp
-0-
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-9
Parent Company Entries
On
OnJuly
July1,
1,20X1,
20X1,PT
PTInduk
Indukrecords
recordsthe
the
purchase
purchaseof
ofPT
PTAnak’
Anak’stock.
stock.
July 1, 20X1
(1) Investment in PT Anak Stock
Cash
246,400,000
Record purchase of PT Anak
stock.
246,400,000
During
Duringthe
thesecond
secondhalf
halfof
of20X1,
20X1,PT
PTInduk
Induk
records
recordsits
itsshare
shareof
ofPT
PTAnak’
Anak’income.
income.
Rp30,000,000
Rp30,000,000
(3) Investment in PT Anak
Stock 24,000,000
x.x.80
80
Income from Subsidiary
24,000,000
Record equity-method income.
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Parent Company Entries
10-10
PT
PTInduk
Indukrecords
recordsdividends
dividendsreceived
receivedfrom
fromPT
PT
Anak
Anakduring
duringthe
thesecond
secondhalf
halfof
of20X1.
20X1.
(2) Cash
14,400,000
Investment in PT Anak Stock
14,400,000
Record dividends from PT Anak.
Rp18,000,000
Rp18,000,000
xx .80
.80
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidation Following an Interim Purchase
20X1
PT Induk
PT Anak
Item
Income from
Subsidiary
24,000
Dividends
Declared
(60,000
)
Investment in
PT Anak
Stock
Eliminations
Debits
Credits
10-11
Consolidated
(30,000)
256,000
An
An entry
entry isis needed
needed to
to eliminate
eliminate
income
income from
fromthe
the subsidiary.
subsidiary.
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidation Following an Interim Purchase
20X1
PT Induk
PT Anak
Eliminations
Debits
Credits
Item
Income from
Subsidiary
24,000
Dividends
Declared
(60,000
)
Investment in
PT Anak
Stock
McGraw-Hill/ Irwin
256,000
(4)
(30,000)
10-12
Consolidated
24,000
(4)
14,400
(4)
9,600
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidation Following an Interim Purchase
20X1
PT Induk
PT Anak
Item
Eliminations
Debits
Credits
10-13
Consolidated
Income to
Noncontrolling
Interest
Dividends
Declared
(60,000)
(30,000)
(4)
14,400
Noncontrolling
Interest
An
An entry
entry isis required
required to
to assign
assign income
income
to
to noncontrolling
noncontrolling interest.
interest.
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidation Following an Interim Purchase
20X1
PT Induk
PT Anak
Item
Income to
Noncontrolling
Interest
Dividends
Declared
Eliminations
Debits
Credits
(5) 10,000
(60,000)
(30,000)
McGraw-Hill/ Irwin
Consolidated
(10,000)
(4)
(5)
Noncontrolling
Interest
10-14
(5)
14,400
6,000
4,000
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidation Following an Interim Purchase
20X1
PT Induk
PT Anak
Item
Preacquisition
Subsidiary Inc.
Retained
Earnings, Jan. 1
Dividend Decl.
Investment in
PT Anak
Common Stock
Noncontrolling
Interest
300,000
)
(60,000
100,000
(30,000)
256,000
500,000
Eliminations
Debits
Credits
(5)
14,400
6,000
(4)
9,600
(11)
4,000
(4)
10-15
Consolidated
200,000
An
An entry
entry isis necessary
necessary to
to eliminate
eliminate the
the
beginning
investment
balance.
beginning
investment
balance.
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidation Following an Interim Purchase
20X1
PT Induk
PT Anak
Eliminations
Debits
Credits
Item
Preacquisition
Subsidiary Inc.
Retained
Earnings, Jan. 1
Dividend Decl.
(6)
300,000
)
(60,000
100,000
(30,000)
16,000
(6)100,000
300,000
(4)
(6)
Common Stock
Noncontrolling
Interest
256,000
500,000
14,400
6,000
9,600
(60,000)
9,600
(6)246,400
(4)
200,000
(6)200,000
500,000
(5)
(6)
McGraw-Hill/ Irwin
Consolidated
(16,000)
(5)
Investment in
PT Anak
10-16
4,000
60,000
64,000
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidated Income Statement, 20X1
10-17
PT Induk and Subsidiary
Consolidated Income Statement
For the Year Ended December 31, 20X1
Sales
Rp600,000,000
Cost of Goods Sold
Gross Margin
-285,000,000
Rp315,000,000
Expenses:
Depreciation and Amortization
Other Expenses
Total Expenses
Preacquisition Subsidiary Income
Income to Noncontrolling Interest
Consolidated Net Income
McGraw-Hill/ Irwin
Rp70,000,000
55,000,000
-125,000,000
Rp190,000,000
-16,000,000
-10,000,000
Rp164,000,000
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidated Earnings per Share
ConsolAdjustidated
+ ment for
net
- parent
income
securities
Diluted
consoli=
dated
EPS
McGraw-Hill/ Irwin
-
10-18
Income
available
Percent
to
SubsiShares
ownercommon
diary
x
+ held by x
ship held
sharediluted
parent
by parent
holders of
EPS
subsidiary
Weighted average of
parent company shares
outstanding
Shares of parent to be
+ issued if dilutive
securities are converted
and options exercised
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidated Net Income
10-19
PT Induk’s separate operating income Rp140,000,000
PT Anak’ income before taxes
50,000,000
Total entity income before taxes
Rp190,000,000
Consolidated income taxes (40%)
-76,000,000
Total entity income after taxes
Rp114,000,000
Less: Income to noncontrolling shareholders
(Rp30,000,000 x .20)
-6,000,000
Consolidated net income
Rp108,000,000
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-20
PT Anak Food’s Earnings Per Share
Basic
Diluted
PT Anak’ net income
Rp30,000,000 Rp30,000,000
Interest effect of assumed conversion of
bonds, net of taxes
(Rp100,000,000 x .06) x (1 - .40)
3,600,000
Income accruing to common stock
Rp30,000,000 Rp33,600,000
Weighted-average common shares
outstanding in 20X1
20,000,000
20,000,000
Additional shares from assumed bond
conversion
4,000,000
Weighted-average shares and share
equivalents
20,000,000
24,000,000
EPS
McGraw-Hill/ Irwin
Rp1,500
Rp1,400
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-21
Chapter Ten
The
End
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Baker / Lembke / King
Additional
Consolidation
Reporting
Issues
McGraw-Hill/ Irwin
10
Electronic Presentation by
Douglas Cloud
Pepperdine University
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidated Statement of Cash Flows
• Prepared after Consolidated I/S, R/E and B/S.
• Steps:
– Adjustment of consolidated NI (depreciation and
amortization resulting from write-off of
differentials)
– Eliminating transfers between affiliates: sale or
purchase of assets, unrealized profit of
intercompany sales
– Non-controlling interest: income is deducted;
receipts and payments
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-2
Consolidated Income Statement, 20X2
PT Induk and Subsidiary
Consolidated Income Statement
For the Year Ended December 31, 20X2
Sales
Gain on Sale of Land
Rp720,000,000
30,000,000
Rp750,000,000
Less: Cost of Goods Sold
Rp340,000,000
Depreciation Expense
76,800,000
Other Expenses
105,000,000
Income Available to All Shareholders
Income to Noncontrolling Interest
Consolidated Net Income
McGraw-Hill/ Irwin
-521800,000
Rp228,200,000
-15,000,000
Rp213,200,000
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-3
Consolidated Cash Flows Statement, 20X2
PT Induk and Subsidiary
Consolidated Statement of Cash Flows
For the Year Ended December 31, 20X2
Cash Flows from Operating Activities:
Top
Consolidated Net Income
Rp213,200,000
Top
Noncash Expenses, Revenues, Losses,
portion
portion
and Gains included in Income:
Depreciation Expense
76,800,000
Income to Noncontrolling
Interest
15,000,000
Gain on Sale of Land
-30,000,000
Increase in Accounts Receivable
-105,000,000
Increase in Inventory
-95,000,000
Increase in Accounts Payable
30,000,000
Net Cash Provided by Operating
Activities
Rpl05,000,000
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-4
Consolidated Cash Flows Statement, 20X2
PT Induk and Subsidiary
Consolidated Statement of Cash Flows
For the Year Ended December 31, 20X2
Cash Flows from Investing Activities:
Acquisition of Equipment
-Rp100,000,000
Sale of Land
70,000,000
Net Cash Used in Investing Activities
-Rp 30,000,000
Cash Flows from Financing Activities:
Dividends Paid:
To Parent Company Shareholders -Rp 60,000,000
To Noncontrolling Shareholders
-8,000,000
Net Cash Used in Financing Activities
-68,000,000
Net Increase in Cash
Rp 7,000,000
Bottom
Bottomportion
portion
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-5
Consolidation Following an Interim Purchase
The results of operations for a subsidiary purchased
during the fiscal period are included in the consolidated
income statement in one of two ways:
Include
Include in
in the
theconsolidated
consolidated income
incomestatement
statement the
the
revenue
revenue and
and expenses
expenses of
of the
the subsidiary
subsidiary as
as ififitit had
had
been
been acquired
acquired at
at the
the beginning
beginning of
ofthe
the fiscal
fiscal period,
period,
and
and deduct
deduct the
the parent’s
parent’s share
shareof
ofthe
thesubsidiary’s
subsidiary’s
preacquisition
preacquisition earnings
earnings at
at the
the bottom
bottomof
of the
the
consolidated
consolidatedincome
incomestatement.
statement.
Include
Include in
in the
theconsolidated
consolidated income
incomestatement
statement only
only
the
the subsidiary’s
subsidiary’s revenue
revenue earned
earned and
and expenses
expenses
incurred
incurred subsequent
subsequent to
to the
the date
date of
of combination.
combination.
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-6
10-7
Consolidation Following an Interim Acquisition
On
OnJuly
July1,
1,20X1,
20X1,PT
PTInduk
Indukpurchases
purchases80
80percent
percentof
of
the
thecommon
commonstock
stockof
ofPT
PTAnak
Anakfor
forits
itsunderlying
underlying
book
bookvalue
valueof
ofRp246,400,000.
Rp246,400,000.
Book value of PT Anak on January 1, 20X1:
Common stock
Retained earnings
Rp200,000,000
100,000,000
Rp300,000,000
Net income, January 1 to June 30, 20X1
20,000,000
Dividends, January 1 to June 30, 20X1
-12,000,000
Book value of PT Anak on July 1, 20X1
Rp308,000,000
PT Induk’s ownership interest
x
.80
Book value on July 1, 20X1, of shares acquired Rp246,400 ,000
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidation Following an Interim Purchase
10-8
The ownership situation on July 1, 20X1, is as follows:
P
7/1/X1
80%
S
20%
McGraw-Hill/ Irwin
Cost of investment
Rp246,400,000
Book value (7/1/X1)
Common stock-PT Anak
Rp200,000,000
Retained earnings-PT Anak
108,000,000
Rp308,000,000
PT Induk’s share
x
.80 -246,400,000
NCI Differential
Rp
-0-
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-9
Parent Company Entries
On
OnJuly
July1,
1,20X1,
20X1,PT
PTInduk
Indukrecords
recordsthe
the
purchase
purchaseof
ofPT
PTAnak’
Anak’stock.
stock.
July 1, 20X1
(1) Investment in PT Anak Stock
Cash
246,400,000
Record purchase of PT Anak
stock.
246,400,000
During
Duringthe
thesecond
secondhalf
halfof
of20X1,
20X1,PT
PTInduk
Induk
records
recordsits
itsshare
shareof
ofPT
PTAnak’
Anak’income.
income.
Rp30,000,000
Rp30,000,000
(3) Investment in PT Anak
Stock 24,000,000
x.x.80
80
Income from Subsidiary
24,000,000
Record equity-method income.
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Parent Company Entries
10-10
PT
PTInduk
Indukrecords
recordsdividends
dividendsreceived
receivedfrom
fromPT
PT
Anak
Anakduring
duringthe
thesecond
secondhalf
halfof
of20X1.
20X1.
(2) Cash
14,400,000
Investment in PT Anak Stock
14,400,000
Record dividends from PT Anak.
Rp18,000,000
Rp18,000,000
xx .80
.80
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidation Following an Interim Purchase
20X1
PT Induk
PT Anak
Item
Income from
Subsidiary
24,000
Dividends
Declared
(60,000
)
Investment in
PT Anak
Stock
Eliminations
Debits
Credits
10-11
Consolidated
(30,000)
256,000
An
An entry
entry isis needed
needed to
to eliminate
eliminate
income
income from
fromthe
the subsidiary.
subsidiary.
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidation Following an Interim Purchase
20X1
PT Induk
PT Anak
Eliminations
Debits
Credits
Item
Income from
Subsidiary
24,000
Dividends
Declared
(60,000
)
Investment in
PT Anak
Stock
McGraw-Hill/ Irwin
256,000
(4)
(30,000)
10-12
Consolidated
24,000
(4)
14,400
(4)
9,600
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidation Following an Interim Purchase
20X1
PT Induk
PT Anak
Item
Eliminations
Debits
Credits
10-13
Consolidated
Income to
Noncontrolling
Interest
Dividends
Declared
(60,000)
(30,000)
(4)
14,400
Noncontrolling
Interest
An
An entry
entry isis required
required to
to assign
assign income
income
to
to noncontrolling
noncontrolling interest.
interest.
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidation Following an Interim Purchase
20X1
PT Induk
PT Anak
Item
Income to
Noncontrolling
Interest
Dividends
Declared
Eliminations
Debits
Credits
(5) 10,000
(60,000)
(30,000)
McGraw-Hill/ Irwin
Consolidated
(10,000)
(4)
(5)
Noncontrolling
Interest
10-14
(5)
14,400
6,000
4,000
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidation Following an Interim Purchase
20X1
PT Induk
PT Anak
Item
Preacquisition
Subsidiary Inc.
Retained
Earnings, Jan. 1
Dividend Decl.
Investment in
PT Anak
Common Stock
Noncontrolling
Interest
300,000
)
(60,000
100,000
(30,000)
256,000
500,000
Eliminations
Debits
Credits
(5)
14,400
6,000
(4)
9,600
(11)
4,000
(4)
10-15
Consolidated
200,000
An
An entry
entry isis necessary
necessary to
to eliminate
eliminate the
the
beginning
investment
balance.
beginning
investment
balance.
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidation Following an Interim Purchase
20X1
PT Induk
PT Anak
Eliminations
Debits
Credits
Item
Preacquisition
Subsidiary Inc.
Retained
Earnings, Jan. 1
Dividend Decl.
(6)
300,000
)
(60,000
100,000
(30,000)
16,000
(6)100,000
300,000
(4)
(6)
Common Stock
Noncontrolling
Interest
256,000
500,000
14,400
6,000
9,600
(60,000)
9,600
(6)246,400
(4)
200,000
(6)200,000
500,000
(5)
(6)
McGraw-Hill/ Irwin
Consolidated
(16,000)
(5)
Investment in
PT Anak
10-16
4,000
60,000
64,000
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidated Income Statement, 20X1
10-17
PT Induk and Subsidiary
Consolidated Income Statement
For the Year Ended December 31, 20X1
Sales
Rp600,000,000
Cost of Goods Sold
Gross Margin
-285,000,000
Rp315,000,000
Expenses:
Depreciation and Amortization
Other Expenses
Total Expenses
Preacquisition Subsidiary Income
Income to Noncontrolling Interest
Consolidated Net Income
McGraw-Hill/ Irwin
Rp70,000,000
55,000,000
-125,000,000
Rp190,000,000
-16,000,000
-10,000,000
Rp164,000,000
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidated Earnings per Share
ConsolAdjustidated
+ ment for
net
- parent
income
securities
Diluted
consoli=
dated
EPS
McGraw-Hill/ Irwin
-
10-18
Income
available
Percent
to
SubsiShares
ownercommon
diary
x
+ held by x
ship held
sharediluted
parent
by parent
holders of
EPS
subsidiary
Weighted average of
parent company shares
outstanding
Shares of parent to be
+ issued if dilutive
securities are converted
and options exercised
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Consolidated Net Income
10-19
PT Induk’s separate operating income Rp140,000,000
PT Anak’ income before taxes
50,000,000
Total entity income before taxes
Rp190,000,000
Consolidated income taxes (40%)
-76,000,000
Total entity income after taxes
Rp114,000,000
Less: Income to noncontrolling shareholders
(Rp30,000,000 x .20)
-6,000,000
Consolidated net income
Rp108,000,000
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-20
PT Anak Food’s Earnings Per Share
Basic
Diluted
PT Anak’ net income
Rp30,000,000 Rp30,000,000
Interest effect of assumed conversion of
bonds, net of taxes
(Rp100,000,000 x .06) x (1 - .40)
3,600,000
Income accruing to common stock
Rp30,000,000 Rp33,600,000
Weighted-average common shares
outstanding in 20X1
20,000,000
20,000,000
Additional shares from assumed bond
conversion
4,000,000
Weighted-average shares and share
equivalents
20,000,000
24,000,000
EPS
McGraw-Hill/ Irwin
Rp1,500
Rp1,400
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
10-21
Chapter Ten
The
End
McGraw-Hill/ Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.