The Financial Statements of Plax Inc Retained Earnings Statements Balance Sheets

question 13

Essay

The financial statements of Plax Inc. and Slate Corp for the year ended December 31, 2018 are shown below:
Income Statements $\begin{array}{|l|l|l|} \hline& \text { Plax Inc. } & \text { Slate Corm } \\\hline \text { Miscellaneous Revenues } & \$ 1,300,000 & \$ 400,000 \\\hline \text { Interest Revenues } & \$ 11,250 &- \\\hline \text { Dividend Revenue } & \$ 15,000 & -\\\hline \text { Less: Expenses } & & \\\hline \text { Miscellaneous Expense } & \$ 864,000 & \$ 259,200 \\\hline \text { Interest Expense } & & \$ 19,400 \\\hline \text { Income Tax Expense } & \$ 198,000 & \$ 48,000 \\\hline \text { Net Income } & \$ 264,250 & \$ 73,400 \\\hline\end{array}$ Retained Earnings Statements
$\begin{array}{|l|l|l|}\hline & \text { Plax Inc. } & \text { Slate Com } \\\hline \text { Balance, J anuary 1, 2018 } & \$ 490,000 & \$ 180,000 \\\hline \text { Net Income } & \$ 264,250 & \$ 73,400 \\\hline \text { Less: Div idends } & \$(126,000) & (\$ 20,000) \\\hline \text { Retained Earnings } & \$ 628,250 & \$ 233,400 \\\hline & & \\\hline\end{array}$ Balance Sheets
$\begin{array}{l|l|l|} \hline& \text { Plax Inc. } & \text { State Corp } \\\hline \text { Miscellaneous Assets } & \$ 1,210,000 & \$ 745,200 \\\hline \text { Investment in Slate Shares } & \$ 196,000 & -\\\hline \text { Investment in Slate Bonds } & \$ 122,250 &- \\\hline \text { Total Assets } & \$ 1,528,250 & \$ 745,200 \\\hline\\\hline \text { Miscellaneous Liabilities } & \$ 600,000 & \$ 150,000 \\\hline \text { Bonds Pay able } &- & \$ 200,000 \\\hline \text { Bond Premium } &- & \$ 1,800 \\\hline \text { Common Shares } & \$ 300,000 & \$ 160,000 \\\hline \text { Retained Earnings } & \$ 628,250 & \$ 233,400 \\\hline \text { Total Liabilities and Equity } & \$ 1,528,250 & \$ 745,200 \\\hline\end{array}$ Other Information:
> Plax acquired 75% of Slate on January 1, 2014 for $196,000, when Slate's retained earnings was $80,000 and the acquisition differential was attributable entirely to goodwill. There were impairment losses to the goodwill of $6,400 and $1,600 in 2015 and 2018 respectively.
> Plax uses the cost method to account for its investment.
> Slate has 10% par value bonds outstanding in the amount of $200,000 which mature on December 31, 2021. The bonds were issued at a premium. On January 1, 2018 the unamortized premium amounted to $2,400 Slate uses the straight line method to amortize the premium.
> On January 1, 2018, Plax acquired $120,000 face value of Slate's bonds for $123,000 Plax also uses the straight line method to amortize any bond premium or discount.
> Both companies are subject to a 40% tax rate.
> Gains and losses from intercompany bond holdings are to be allocated to the two companies when consolidated financial statements are prepared.
-Prepare Plax's Consolidated Statement of Financial Position as at December 31, 2018.

---

Definitions:

Myosin

A protein that, along with actin, enables muscular contraction and movement in animal cells.

Serotonin

A neurotransmitter that is involved in the regulation of mood, sleep, appetite, and pain perception.

Neurotransmitter

Chemical substances that transmit nerve impulses across a synapse from one neuron to another.

Motor Neuron

An efferent neuron that transmits impulses away from the central nervous system to skeletal muscle.