Chapter 5 E5
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Problem 5-8 (Algo) (LO 5-3, 5-4, 5-5) Angela, Inc., holds a 90 percent interest in Corby Company. During 2020, Corby sold inventory costing $97,600 to Angela for $122,000. Of this inventory, $47,400 worth was not sold to outsiders until 2021. During 2021, Corby sold inventory costing $130,900 to Angela for $187,000. A total of $57,400 of this inventory was not sold to outsiders until 2022. In 2021, Angela reported separate net income of $153,000 while Corby's net income was $127,500 after excess amortizations. What is the noncontrolling interest in the 2021 income of the subsidiary? Multiple Choice . $11,976. $12,750. O O $13,750. O $12,550. Problem 5-20 (Algo) (LO 5-2, 5-3, 5-4, 5-5) On January 1, 2020, Doone Corporation acquired 70 percent of the outstanding voting stock of Rockne Company for $378,000 consideration. At the acquisition date, the fair value of the 30 percent noncontrolling interest was $162,000, and Rockne's assets and liabilities had a collective net fair value of $540,000. Doone uses the equity method in its internal records to account for its investment in Rockne. Rockne reports net income of $160,000 in 2021. Since being acquired, Rockne has regularly supplied inventory to Doone at 25 percent more than cost. Sales to Doone amounted to $220,000 in 2020 and $320,000 in 2021. Approximately 40 percent of the inventory purchased during any one year is not used until the following year. a. What is the noncontrolling interest's share of Rockne's 2021 income? b. Prepare Doone's 2021 consolidation entries required by the intra-entity inventory transfers. Complete this question by entering your answers in the tabs below. Required A | Required B What is the noncontrolling interest's share of Rockne's 2021 income? |Noncontroling interest's share 5 4560@]
Required A Required B Prepare Doone's 2021 consolidation entries required by the intra-entity inventory transfers. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) l No Transaction Accounts Debit Credit 1 1 Retained earnings (] 17,600 @ Cost of goods sold (] 17,600 @ 2 2 Sales @ 320000©@ Cost of goods sold (] 320,000 @ 3 3 Cost of goods sold (] 25,600 @ Inventory o 25,600 @ < Required A Problem 5-18 (Algo) (LO 5-3, 5-4, 5-5) On January 1, 2020, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,080,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $780,000, retained earnings of $330,000, and a noncontrolling interest fair value of $270,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing. During the next two years, Smashing reported the following: Inventory Dividends Purchases from Net Income Declared Corgan 2020 $230,000 $43,000 $180,000 2021 210,000 53,000 200,000 Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2020 and 2021, 40 percent of the current year purchases remain in Smashing's inventory. a. Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2021. b. Prepare the worksheet adjustments for the December 31, 2021, consolidation of Corgan and Smashing. Complete this question by entering your answers in the tabs below. Required A Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2021. [Investment balance 12/31/21 s 1306000 @ Required B
I No Transaction Accounts Debit Credit fl 1 1 Investment in Smashing hd 27,000 Cost of goods sold - 27,000 2 2 Common stock - Smashing hd 780,000 Retained earnings - Smashing A 517,000 Investment in Smashing v 1,037,600 Noncontrolling interest v 259,400 3 3 Covenants hd 228,000 Investment in Smashing hd 182,400 Noncontrolling interest v 45,600 4 4 Equity in earnings of Smashing - 155,400 Investment in Smashing v 155,400 5 5 Investment in Smashing A 42,400 Dividends declared - 42,400 6 6 Amortization expense hd 12,000 Covenants A 12,000 7 7 Sales - 200,000 Cost of goods sold A 200,000 8 8 Cost of goods sold - 30,000 Inventory - 30,000 Problem 5-23 (Algo) (LO 5-7) On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Inc., for $1,089,000 in casl and stock options. At the acquisition date, NetSpeed had common stock of $1140,000 and Retained Earnings of $57,000. The acquisition-date fair value of the 10 percent noncontrolling interest was $121,000. QuickPort attributed the $13,000 excess of NetSpeed's fair value over book value to a database with a five-year remaining life. During the next two years, NetSpeed reported the following: Dividends Net Income Declared 2020 $ 18,200 $ 2,600 2021 26,000 2,600 On July 1, 2020, QuickPort sold communication equipment to NetSpeed for $19,000. The equipment originally cost $23,000 and had accumulated depreciation of $7,600 and an estimated remaining life of three years at the date of the intra-entity transfer. a. Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of December 31, 2021. b. Prepare the worksheet adjustments for the December 31, 2021, consolidation of QuickPort and NetSpeed. Complete this question by entering your answers in the tabs below. Required A Required B Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of December 31, 2021. [Investment in NetSpeed, Inc., 12131/21 [s 1117620
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Related Questions
P Inc. owns a 60% interest in S Corp. During 2020 S sold inventory costing $160,000 to P for $200,000. A total of 18 percent of this inventory was not sold to outsiders until 2021. During 2021 S sold inventory costing $297,500 to P for $350,000. A total of 30 percent of this inventory was not sold to outsiders until 2022. In 2021 P reported the cost of goods sold of $607,500 while S reported $450,000. What is the consolidated cost of goods sold in 2021?
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Choose the correct. Parkette, Inc., acquired a 60 percent interest in Skybox Company several years ago. During 2017, Skybox sold inventory costing $160,000 to Parkette for $200,000. A total of 18 percent of this inventory was not sold to outsiders until 2018. During 2018, Skybox sold inventory costing $297,500 to Parkette for $350,000. A total of 30 percent of this inventory was not sold to outsiders until 2019. In 2018, Parkette reported cost of goods sold of $607,500 while Skybox reported $450,000. What is the consolidated cost of goods sold in 2018?a. $698,950b. $720,000c. $1,066,050d. $716,050
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Boboy, Inc. acquired 60 percent interest in Homer Co. several years ago. During 2020, Homer sold
inventory costing P75,000 to Boboy for P100.000. A total of 16 percent of this inventory was not sold to
outsider until 2021. During 2021, Homer sold inventory costing P96,000 to Boboy for P120,000. A total
of 35 percent of this inventory was not sold to outsiders until 2022. In 2021, Boboy reported cost of
sales of P380,000 while Homer reported P210,000. What is consolidated cost of sales?
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Dysabel Corp. owns 80% of Marina, Inc.'s common stock. During 2020, Dysabel sold Marina
P337,500 of inventory on the same terms as sales made to third parties. Marina sold all of the
inventory purchased from Dysabel in 2020. The following information pertains to Marina and
Dysabel's sales for 2020:
Dysabel
P1,350,000
540,000
P 810,000
Marina
P945,000
472,500
P474,500
Sales
Cost of sales .
What amount should Dysabel report as Cost of sales in its 2020 consolidated income statement?
O 580,500
1,012,500
918,000
675,000
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Rommel, Inc. acquired a 60% interest in Mikee Company several years ago. During 2020, Mikee sold inventory costing P75,000 to Rommel for P100,000. A total of 16% of this inventory was not sold to outsider until 2021. During 2021, Mikee sold inventory costing P96,000 to Rommel for P120,000. A total of 35% of this inventory was not sold to outsiders until 2022. In 2021, Rommel reported cost of sales of P380,000 while Mikee reported P210,000. What is the consolidated cost of sales?a. 522,400b. 474,400c. 473,400d. 594,400
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15. Northridge, Inc., buys 40% of Matador Company on January 1, 2019. for $550,000. The equity method of accounting is to be used, Matador's net assets on that date were $1.2 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Matador immediately begins supplying inventory to Northridge as follows: Amount Held by Northridge
Year Cost to Matador Transfer Price At Year End (at transfer price)2019 $70,000 $100,000 $25,0002020 $96,000 $150,000 $45,000Inventory held at the end of one year by Northridge is sold at the beginning of the next. Matador reports net income of $100,000 in 2019 and $150.000 in 2020 and declares (and pays)…
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aste Company owns an 80% controlling interest in the Bastion Company. Bastion regularly sells merchandise to Baste, which then sold to outside parties. The gross profit on all such sales is 40%. On January 1, 2019, Baste sold land and a building to Bastion. The value of the parcel is 20% to land and 80% to structures. The data are the following:Baste BastionInternally generated net income, 2019 P1,560,000 P750,000Internally generated net income, 2020 10,320,000 705,000Intercompany merchandise sales, 2019 300,000Intercompany merchandise sales, 2020 360,000Intercompany inventory, December 31, 2019 45,000Intercompany inventory, December 31, 2020 60,000Cost of real estate sold on January 1, 2019 1,800,000Sales price of real estate on January 1, 2019 2,400,000Depreciable life of building 20 yearsFor 2019, what is the consolidated comprehensive income attributable to controlling interest?a. 1,575,000b. 1,597,500c. 1,569,600d. 1,875,000
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2.
Martindale Company, a 100% owned subsidiary of Weisman Corporation, sells inventory to Weisman at a 20% profit on selling price. The following data are available pertaining to inter-company purchases by Weisman: Inter-company sales: Unsold at year end (based on selling price): 2020: $18,000 2020: $4,000 2021: $19,400 2021: $6,000 2022: $21,500 2022: $8,000 Martindale's profit numbers were $125,000, $142,000 and $265,000 for 2020, 2021, and 2022, respectively. Weisman received dividends from Martindale of $25,000 for 2020 and 2021, and $30,000 for 2022. Assume Weisman uses the equity method to account for its investment in Martindale. What is the balance in pre-consolidation Income (loss) from subsidiary for 2022? Select one: A. $268,600 B. $235,000 C. $265,400 D. $264,600
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Claire Corporation owns 80% of Jerald, Inc. ordinary stock. During 2020, Claire sold Jerald for P150,000 of inventory on the same terms as sales made to third parties. Jerald sold 60% of the inventory purchased from Claire in 2020.The following information pertains to Claire and Jerald's sales for 2020: Claire JeraldSales P1,000,000 P700,000Cost of Sales 400,000 350,000What amount should Claire report as sales in its 2020 consolidated income statement
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P Corporation owns 80 percent of S Inc.’s common stock. During 2020, P sold Inventory to S for $250,000 on the same terms as sales
made to third parties. S sold all of the inventory purchased from P in 2020
The following information pertains to S and P sales for 2020
P s
Sales $1,000,000 $ 700,000
Cost of Sales (400,000) (350,000)
Gross Profit $ 600,000 $ 350,000
What amount should P report as cost of sales in its 2021 consolidated income statement
Select one:
a. $680,000
b. $430,000
c. $750,000
d. $500,000
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Baelfire Corporation owns an 80% interest in Sheriff Corporation acquired several years ago.
Sheriff regularly sells merchandise to its parent at 125% of Sheriff's cost. Gross profit data of
Baelfire and Sheriff for the year 2020 are as follows:
Baelfire
P650,000
520,000
P 130,000
Sheriff
P520,000
416,000
P104,000
Sales
Cost of goods sold .
Gross profit .
During 2020, Baelfire purchases inventory items from Sheriff at a transfer price of
P260,000. Baelfire's December 31, 2019 and 2020 inventories included goods acquired from
Sheriff of P65,000 and P81,250, respectively.
The Unrealized profits in the year-end 2019 and 2020 inventories were:
65,000 and 81,250 respectively
O 30,400 and 13,000 respectively
13,000 and 16,250 respectively
520,000 and 65,000 respectively
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Parkette, Inc., acquired a 60 percent interest in Skybox Company several years ago. During 2020, Skybox sold inventory costing $90,200 to Parkette for $110,000. A total of 12 percent of this inventory was not sold to outsiders until 2021. During 2021, Skybox sold inventory costing $294,800 to Parkette for $335,000. A total of 29 percent of this inventory was not sold to outsiders until 2022. In 2021, Parkette reported cost of goods sold of $527,500 while Skybox reported $422,500. What is the consolidated cost of goods sold in 2021?
Multiple Choice
a
$605,718.
b
$959,282.
c
$635,400.
d
$624,282.
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(TCO A) Steven Inc. sold $219,000 in inventory to Thomas Co. during 20X0 for $300,000. Thomas resold $100,000 of this merchandise in 20X0 with the remainder to be disposed of during 20X1.Assume Steven owns 28% of Thomas and applies the equity method.Required:(1) Determine Steven's share of the unrealized gain at the end of 20X0.(2) Prepare the journal entry Steven should record at the end of 20X0 to defer the unrealized intra-entity inventory profit.
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Pint Co. owns 90% of the outstanding shares of Glass Inc. During 2022, Pint sold merchandise costing $100,000 to Glass for $200,000. On December 31, 2022, 25% of this merchandise remains in Sub's inventory. Assuming a 40% tax rate, how much unrealized profit should be eliminated from ending inventory in the consolidation process on December 31, 2022?
Multiple Choice
a. $25,000
b. $30,000
c. $50,000
d. $40,000
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RAM, Inc., acquired a 60 percent interest in LMU Company several years ago. During 2017, LMU sold inventory costing $160,000 to RAM for $200,000. A total of 18 percent of this inventory was not sold to outsiders until 2018. During 2018, LMU sold inventory costing $297,500 to RAM for $350,000. A total of 30 percent of this inventory was not sold to outsiders until 2019. In 2018, RAM reported cost of goods sold of $607,500 while LMU reported $450,000.
What consolidation entries will be made for these transactions in 2018 consolidation?
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Pol Co. acquired 80% of Sally Co. on January 1, 20230. Pol purchases inventory for 280,000 on April 1, 2030 and sell it to Sally for 380,000 on June 1, 2030. Sally still holds the inventory at the end of the year and determines that its market value is 328,000 at that time. Sally writes the inventory down from 380,000 to 328,000 on December 31, 2030. What amount of inventory should be eliminated in the consolidated working paper for 2030?
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Angela, Incorporated, holds a 90 percent interest in Corby Company. During 2023, Corby sold inventory
costing $105,750 to Angela for $141,000. Of this inventory, $48,600 worth was not sold to outsiders until
2024. During 2024, Corby sold inventory costing $96,850 to Angela for $149,000. A total of $51,400 of this
inventory was not sold to outsiders until 2025. In 2024, Angela reported separate net income of $228,000
while Corby's net income was $100,500 after excess amortizations. What is the noncontrolling interest in
the 2024 income of the subsidiary? Multiple Choice $10,050 $9,466 $10,330 $9,980
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Angela, Inc., holds a 90 percent interest in Corby Company. During 2017, Corby sold inventory costing $77,000 to Angela for $110,000. Of this inventory, $40,000 worth was not sold to outsiders until 2018. During 2018, Corby sold inventory costing $72,000 to Angela for $120,000. A total of $50,000 of this inventory was not sold to outsiders until 2019. In 2018, Angela reported separate net income of $150,000 while Corby’s net income was $90,000 after excess amortizations. What is the noncontrolling interest in the 2018 income of the subsidiary?a. $8,000b. $8,200c. $9,000d. $9,800
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Razor Afternoon Co. owns 80% interest in Slice Morning Co. During 2019, Razor sold inventories costing ₱200,000 to Slice for ₱300,000. One-fourth of the inventories were unsold as of December 31, 2019 and were included in Slice’s year-end statement of financial position at the purchase price from Razor. The individual financial statements of Razor and Slice on December 31, 2019 show the following information:
Razor
Slice
Inventory
1,260,000
380,000
Sales
6,700,000
2,700,000
Cost of sales
(3,015,000)
(1,755,000)
Gross profit
3,685,000
945,000
There are no fair value adjustments arising from the business combination date.
Write the Eliminating Entries for Periodic Inventory System.
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Palm Company owns 100% of Soso Company. During year X1, Soso sold merchandise costing $50,000 to Palm for $80,000. As of 12/31/X1, 40% of the merchandise remained in Palm's inventory. Assuming that Soso reported a $100,000 net income an paid $20,000 of dividends in year X1, how much investment income should should Palm recognize in year X1?
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P Company acquired a 75% interest in S Company in 2018. S reported net income of P325,000 in 2020. During 2019, there was an upstream sales of merchandise for P76,000 at a cost of P52,000. Two-fifths of the merchandise was later resold by P to outsiders for P35,000 during 2020. In 2020, P purchased merchandise from S for P88,000 at a profit of P32,000. One-fourth of the merchandise was resold by P to outsiders for P27,000 during 2020. Compute the non-controlling interest in net income in 2020
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Camille, Inc., sold $147,000 in inventory to Eckerle Company during 2020 for $245,000. Eckerle resold $109,000 of this merchandise in 2020 with the remainder to be disposed of during 2021. Assuming that Camille owns 34 percent of Eckerle and applies the equity method, what journal entry is recorded at the end of 2020 to defer the intra-entity gross profit?
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X Inc. owns 70% of Y Inc. During 2020, X Inc. sold inventory to Y for $10,000. Half of
this inventory remained in Y's warehouse at year end. Y Inc. sold inventory to X Inc.
for $5,000. 40% of this intentory remained in X's warehouse at year end. The gross
profit percentage on sales is 20% for both companies. Unless otherwise stated,
assume X Inc. uses the cost method to account for its investment in Y Inc.
What effect (if any) would the unrealized profits on the above intercompany sales
have on the non-controlling interest account on the consolidated balance sheet?
There would be a decrease to the non-controlling interest account for the
amount of $120
There would be a decrease to the non-controlling interest account for the
amount of $80
There would be a decrease to the non-controlling interest account for the
amount of $400
There would be no impact on the non-controlling interest account.
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Anderson Company, a 90% owned subsidiary of Philbin Corporation, transfers inventory to Philbin at a 25% gross profit rate. The following data are available pertaining specifically to Philbin’s intra-entity purchases from Anderson. Anderson was acquired on January 1, 2020.
2020
2021
2022
Purchases by Philbin
$
8,000
$
12,000
$
15,000
Ending inventory on Philbin’s books
1,200
4,000
3,000
Assume the equity method is used. The following data are available pertaining to Anderson’s income and dividends.
2020
2021
2022
Anderson’s net income
$
70,000
$
85,000
$
94,000
Dividends paid by Anderson
10,000
10,000
15,000
For consolidation purposes, what amount would be debited to January 1 retained earnings for the 2020 consolidation worksheet entry with regard to the unrecognized intra-entity gross profit remaining in ending inventory with respect to the 2020 intra-entity transfer of merchandise?
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Anderson Company, a 90% owned subsidiary of Philbin Corporation, transfers inventory to Philbin at a 25% gross profit rate. The following data are available pertaining specifically to Philbin’s intra-entity purchases from Anderson. Anderson was acquired on January 1, 2020.
2020
2021
2022
Purchases by Philbin
$
8,000
$
12,000
$
15,000
Ending inventory on Philbin’s books
1,200
4,000
3,000
Assume the equity method is used. The following data are available pertaining to Anderson’s income and dividends.
2020
2021
2022
Anderson’s net income
$
70,000
$
85,000
$
94,000
Dividends paid by Anderson
10,000
10,000
15,000
For consolidation purposes, what amount would be debited to January 1 retained earnings for the 2022 consolidation worksheet entry with regard to the unrecognized intra-entity gross profit remaining in ending inventory with respect to the 2021 intra-entity transfer of merchandise?
Multiple Choice
$3,000.…
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Anderson Company, a 90% owned subsidiary of Philbin Corporation, transfers inventory to Philbin at a 25% gross profit rate.
The following data are available pertaining specifically to Philbin's intra-entity purchases from Anderson. Anderson was
acquired on january 1, 2020.
2020
2021
2022
Purchases by Philbin
Ending inventory on Philbin's books 1,200 4,000
$ ৪,000 5 12,000 $15.000
3,000
Assume the equity method is used. The following data are available pertaining to Anderson's income and dividends.
2020
2021
2022
$ 70,000 $ 85,000 $ 94,000
Dividends paid by Anderson 10,000 10,000 15,000
Anderson's net income
Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers,
compute the net income attributable to the noncontrolling interest of Anderson for 2022.
O $9,400.
$9,375.
$9,425.
$8,485.
$9,325.
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PP Co. regularly sells merchandise to its 80%-owned subsidiary, SS Co. In 2021, PP sold merchandise to SS that cost P64,000 for P80,000. Half of the merchandise remained in the inventory of SS as of December 31, 2021. During 2022, PP sold merchandise that cost P100,000 to SS for P125,000. 60% of the 2022 inter company sale was resold to the customers of SS. Selected profit or loss items for 2022 are provided below:
PP SS
Sales P600,000 P300,000
Cost of sales 480,000 250,000
Operating expenses 40,000 20,000
How much is the consolidated cost of sales?
A. 607,000 B. 603,000 C. 732,000 D. 853,000
How much is the consolidated net income attributable to the parent for 2022? A 102,000 B. None of the choices C. 108,000 D. 102,400
How much is the consolidated sales for 2022? A. 855,000 B. 800,000 C. 900,000 D. 775.000
How much is the consolidated net income…
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2) At December 31, 2021, The Comparative income statements of Polo Corporation and Solo
Corporation show the following (in thousands):
Sales
Income from Solo
Cost of goods sold
Operating expenses
Polo
$3,200
384
1,800
800
Solo
$1,300
400
400
Additional information
1. Polo Corporation acquired 80 percent of Solo for $1,600,000 on January 1, 2019, when Solo's
Stockholders' equity at book value was $1,400,000.
2. The excess of the cost Polo's investment in Solo over book value acquired was allocated
$60,000 to undervalued inventories that were sold in 2019, $80,000 to undervalued equipment
with a four-year remaining useful life, and the remainder to goodwill.
Required:
Prepare a consolidated income statement for Polo Corporation and Subsidiary for the year ended
December 31, 2021.
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Related Questions
- P Inc. owns a 60% interest in S Corp. During 2020 S sold inventory costing $160,000 to P for $200,000. A total of 18 percent of this inventory was not sold to outsiders until 2021. During 2021 S sold inventory costing $297,500 to P for $350,000. A total of 30 percent of this inventory was not sold to outsiders until 2022. In 2021 P reported the cost of goods sold of $607,500 while S reported $450,000. What is the consolidated cost of goods sold in 2021?arrow_forwardChoose the correct. Parkette, Inc., acquired a 60 percent interest in Skybox Company several years ago. During 2017, Skybox sold inventory costing $160,000 to Parkette for $200,000. A total of 18 percent of this inventory was not sold to outsiders until 2018. During 2018, Skybox sold inventory costing $297,500 to Parkette for $350,000. A total of 30 percent of this inventory was not sold to outsiders until 2019. In 2018, Parkette reported cost of goods sold of $607,500 while Skybox reported $450,000. What is the consolidated cost of goods sold in 2018?a. $698,950b. $720,000c. $1,066,050d. $716,050arrow_forwardBoboy, Inc. acquired 60 percent interest in Homer Co. several years ago. During 2020, Homer sold inventory costing P75,000 to Boboy for P100.000. A total of 16 percent of this inventory was not sold to outsider until 2021. During 2021, Homer sold inventory costing P96,000 to Boboy for P120,000. A total of 35 percent of this inventory was not sold to outsiders until 2022. In 2021, Boboy reported cost of sales of P380,000 while Homer reported P210,000. What is consolidated cost of sales?arrow_forward
- Dysabel Corp. owns 80% of Marina, Inc.'s common stock. During 2020, Dysabel sold Marina P337,500 of inventory on the same terms as sales made to third parties. Marina sold all of the inventory purchased from Dysabel in 2020. The following information pertains to Marina and Dysabel's sales for 2020: Dysabel P1,350,000 540,000 P 810,000 Marina P945,000 472,500 P474,500 Sales Cost of sales . What amount should Dysabel report as Cost of sales in its 2020 consolidated income statement? O 580,500 1,012,500 918,000 675,000arrow_forwardRommel, Inc. acquired a 60% interest in Mikee Company several years ago. During 2020, Mikee sold inventory costing P75,000 to Rommel for P100,000. A total of 16% of this inventory was not sold to outsider until 2021. During 2021, Mikee sold inventory costing P96,000 to Rommel for P120,000. A total of 35% of this inventory was not sold to outsiders until 2022. In 2021, Rommel reported cost of sales of P380,000 while Mikee reported P210,000. What is the consolidated cost of sales?a. 522,400b. 474,400c. 473,400d. 594,400arrow_forward15. Northridge, Inc., buys 40% of Matador Company on January 1, 2019. for $550,000. The equity method of accounting is to be used, Matador's net assets on that date were $1.2 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Matador immediately begins supplying inventory to Northridge as follows: Amount Held by Northridge Year Cost to Matador Transfer Price At Year End (at transfer price)2019 $70,000 $100,000 $25,0002020 $96,000 $150,000 $45,000Inventory held at the end of one year by Northridge is sold at the beginning of the next. Matador reports net income of $100,000 in 2019 and $150.000 in 2020 and declares (and pays)…arrow_forward
- aste Company owns an 80% controlling interest in the Bastion Company. Bastion regularly sells merchandise to Baste, which then sold to outside parties. The gross profit on all such sales is 40%. On January 1, 2019, Baste sold land and a building to Bastion. The value of the parcel is 20% to land and 80% to structures. The data are the following:Baste BastionInternally generated net income, 2019 P1,560,000 P750,000Internally generated net income, 2020 10,320,000 705,000Intercompany merchandise sales, 2019 300,000Intercompany merchandise sales, 2020 360,000Intercompany inventory, December 31, 2019 45,000Intercompany inventory, December 31, 2020 60,000Cost of real estate sold on January 1, 2019 1,800,000Sales price of real estate on January 1, 2019 2,400,000Depreciable life of building 20 yearsFor 2019, what is the consolidated comprehensive income attributable to controlling interest?a. 1,575,000b. 1,597,500c. 1,569,600d. 1,875,000arrow_forward2. Martindale Company, a 100% owned subsidiary of Weisman Corporation, sells inventory to Weisman at a 20% profit on selling price. The following data are available pertaining to inter-company purchases by Weisman: Inter-company sales: Unsold at year end (based on selling price): 2020: $18,000 2020: $4,000 2021: $19,400 2021: $6,000 2022: $21,500 2022: $8,000 Martindale's profit numbers were $125,000, $142,000 and $265,000 for 2020, 2021, and 2022, respectively. Weisman received dividends from Martindale of $25,000 for 2020 and 2021, and $30,000 for 2022. Assume Weisman uses the equity method to account for its investment in Martindale. What is the balance in pre-consolidation Income (loss) from subsidiary for 2022? Select one: A. $268,600 B. $235,000 C. $265,400 D. $264,600arrow_forwardClaire Corporation owns 80% of Jerald, Inc. ordinary stock. During 2020, Claire sold Jerald for P150,000 of inventory on the same terms as sales made to third parties. Jerald sold 60% of the inventory purchased from Claire in 2020.The following information pertains to Claire and Jerald's sales for 2020: Claire JeraldSales P1,000,000 P700,000Cost of Sales 400,000 350,000What amount should Claire report as sales in its 2020 consolidated income statementarrow_forward
- P Corporation owns 80 percent of S Inc.’s common stock. During 2020, P sold Inventory to S for $250,000 on the same terms as sales made to third parties. S sold all of the inventory purchased from P in 2020 The following information pertains to S and P sales for 2020 P s Sales $1,000,000 $ 700,000 Cost of Sales (400,000) (350,000) Gross Profit $ 600,000 $ 350,000 What amount should P report as cost of sales in its 2021 consolidated income statement Select one: a. $680,000 b. $430,000 c. $750,000 d. $500,000arrow_forwardBaelfire Corporation owns an 80% interest in Sheriff Corporation acquired several years ago. Sheriff regularly sells merchandise to its parent at 125% of Sheriff's cost. Gross profit data of Baelfire and Sheriff for the year 2020 are as follows: Baelfire P650,000 520,000 P 130,000 Sheriff P520,000 416,000 P104,000 Sales Cost of goods sold . Gross profit . During 2020, Baelfire purchases inventory items from Sheriff at a transfer price of P260,000. Baelfire's December 31, 2019 and 2020 inventories included goods acquired from Sheriff of P65,000 and P81,250, respectively. The Unrealized profits in the year-end 2019 and 2020 inventories were: 65,000 and 81,250 respectively O 30,400 and 13,000 respectively 13,000 and 16,250 respectively 520,000 and 65,000 respectivelyarrow_forwardParkette, Inc., acquired a 60 percent interest in Skybox Company several years ago. During 2020, Skybox sold inventory costing $90,200 to Parkette for $110,000. A total of 12 percent of this inventory was not sold to outsiders until 2021. During 2021, Skybox sold inventory costing $294,800 to Parkette for $335,000. A total of 29 percent of this inventory was not sold to outsiders until 2022. In 2021, Parkette reported cost of goods sold of $527,500 while Skybox reported $422,500. What is the consolidated cost of goods sold in 2021? Multiple Choice a $605,718. b $959,282. c $635,400. d $624,282.arrow_forward
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