Analyzing Financial Statements with Maddox Co. and Smoltz Corp

School: University of Illinois, Urbana Champaign - Course: ACCY 410 - Subject: Accounting

Maddox Co.Smoltz Corp. Sales revenue760,000420,000 Cost of goods sold(405,000)(266,000) Gross profit355,000154,000 Operating expenses(202,400)(93,700) Equity income51,800 Net Income204,40060,300 Retained Earnings, 1/1/17662,300305,600 Net income204,40060,300 Dividends(41,200)(24,650) Retained Earnings, 12/31/17825,500341,250 Cash and receivables199,800161,180 Inventory243,450135,090 PP&E (Net)745,800304,630 Equity investment533,150 Total Assets1,722,200600,900 Accounts payable41,30042,980 Accrued liabilities56,40050,070 Notes payable-90,000 Common stock93,20033,600 Additional paid-in capital705,80043,000 Retained Earnings, 12/31/17825,500341,250 Total Liabilities and Equities1,722,200600,900 aInvestment in subsidiary Dr. Equity investment Cr. Common stock Cr. Additional paid in capital bEquity Income Equity Income Net income60,300

8,500Balance51,800 cEquity Investment Equity Invesmtent 506,000 Investment 60,300 Net income 8,500 24,650 Balance533,150 dConsolidating entries E entryDr. Common stock Dr. Additional paid in capital Dr. Retained earnings Cr. Equity investment A entryDr. Building Dr. Patent Dr. Goodwill Cr. Equity Investment C entryDr. Equity income Cr. Dividends declared Cr. Equity investment D entryDr. Depreciation expense Dr. Amortization expense Cr. Building Cr. Patent