None Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Incorporated, on January 1, 2023, when Scenichad a net book value of $470,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $5,000 per year.Placid Lake's 2024 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was$370,000. Scenic reported net income of $180,000. Placid Lake declared $170,000 in dividends during this period; Scenic paid$47,000. At the end of 2024, selected figures from the two companies' balance sheets were as follows:ItemsInventoryLandEquipment (net)Placid Lake$210,000670,000470,000Scenic$ 97,000270,000370,000During 2023, intra-entity sales of $110,000 (original cost of $56,000) were made. Only 10 percent of this inventory was still held withinthe consolidated entity at the end of 2023. In 2024, $160,000 in intra-entity sales were made with an original cost of $66,000. Of thismerchandise, 20 percent had not been resold to outside parties by the end of the year.Each of the following questions should be considered as an independent situation for the year 2024.Required:a. What is consolidated net income for Placid Lake and its subsidiary?b. If the intra-entity sales were upstream, how would consolidated net income be allocated to the controlling and noncontrollingInterest?c. If the intra-entity sales were downstream, how would consolidated net income be allocated to the controlling and noncontrollingInterest?d. What is the consolidated balance in the ending Inventory account?e. Assume that no intra-entity inventory sales occurred between Placid Lake and Scenic. Instead, in 2023, Scenic sold land costing$37,000 to Placid Lake for $64,000. On the 2024 consolidated balance sheet, what value should be reported for land?f-1. Assume that no intra-entity inventory or land sales occurred between Placid Lake and Scenic. Instead, on January 1, 2023, Scenicsold equipment (that originally cost $170,000 but had a $67,000 book value on that date) to Placid Lake for $94,000. At the time ofsale, the equipment had a remaining useful life of five years. What worksheet entries are made for a December 31, 2024,consolidation of these two companies to eliminate the impact of the intra-entity transfer?f-2. Assume that no intra-entity inventory or land sales occurred between Placid Lake and Scenic. Instead, on January 1, 2023, Scenicsold equipment (that originally cost $170,000 but had a $67,000 book value on that date) to Placid Lake for $94,000. At the time ofsale, the equipment had a remaining useful life of five years. For 2024, what is the noncontrolling interest's share of Scenic's netincome?Complete this question by entering your answers in the tabs below.Req AReq B and C Req D and EReq F1Req F2What is consolidated net income for Placid Lake and its subsidiary?Consolidated net income

"Since you have asked a question with sub-parts more than three, as per guidelines, the first three…

Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Incorporated, on January 1, 2023, when Scenic had a net book value of $470,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $5,000 per year. Placid Lake's 2024 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $370,000. Scenic reported net income of $180,000. Placid Lake declared $170,000 in dividends during this period: Scenic paid $47,000. At the end of 2024, selected figures from the two companies' balance sheets were as follows: Items Inventory Land Equipment (net) Placid Lake $ 210,000 670,000 470,000 Scenic $ 97,000 270,000 370,000

Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Incorporated, on January 1, 2023, when Scenic had a net book value of $470,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $5,000 per year. Placid Lake's 2024 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $370,000. Scenic reported net income of $180,000. Placid Lake declared $170,000 in dividends during this period: Scenic paid $47,000. At the end of 2024, selected figures from the two companies' balance sheets were as follows: Items Inventory Land Equipment (net) Placid Lake $ 210,000 670,000 470,000 Scenic $ 97,000 270,000 370,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 8MC

See similar textbooks

Similar questions

Placid Lake Corporation acquired 80 percent of the outstanding voting stock of Scenic, Inc., on January 1, 202O, when Scenic had a net book value of $540,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $7,000 per year. Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra- entity sales) was $440,000. Scenic reported net income of $250,000. Placid Lake declared $130,000 in dividends during this period; Scenic paid $54,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic $ 280,000 740,000 540,000 $ 104,000 340,000 440,000 Inventory Land Equipment (net) During 2020, intra-entity sales of $145,000 (original cost of $70,000) were made. Only 20 percent of this inventory was still held within the consolidated entity at the end of 2020. In 2021, $230,000 in intra-entity sales were made with an original cost of $73,000. Of this…
Placid Lake Corporation acquired 90 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2020, when Scenic had a net book value of $610,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $4,000 per year. Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $510,000. Scenic reported net income of $320,000. Placid Lake declared $200,000 in dividends during this period; Scenic paid $61,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic Inventory $ 350,000 $ 111,000 Land 810,000 410,000 Equipment (net) 610,000 510,000 During 2020, intra-entity sales of $180,000 (original cost of $84,000) were made. Only 30 percent of this inventory was still held within the consolidated entity at the end of 2020. In 2021, $300,000 in intra-entity sales were made…
Placid Lake Corporation acquired 80 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2020, when Scenic had a net book value of $570,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $5,000 per year. Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $470,000. Scenic reported net income of $280,000. Placid Lake declared $160,000 in dividends during this period; Scenic paid $57,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic Inventory $ 310,000 $ 107,000 Land 770,000 370,000 Equipment (net) 570,000 470,000 During 2020, intra-entity sales of $160,000 (original cost of $76,000) were made. Only 20 percent of this inventory was still held within the consolidated entity at the end of 2020. In 2021, $260,000 in intra-entity sales were made…
Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2020, when Scenic had a net book value of $470,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $5,000 per year. Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $370,000. Scenic reported net income of $180,000. Placid Lake declared $170,000 in dividends during this period; Scenic paid $47,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic Inventory $ 210,000 $ 97,000 Land 670,000 270,000 Equipment (net) 470,000 370,000 During 2020, intra-entity sales of $110,000 (original cost of $56,000) were made. Only 10 percent of this inventory was still held within the consolidated entity at the end of 2020. In 2021, $160,000 in intra-entity sales were made…
Placid Lake Corporation acquired 80 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2020, when Scenic had a net book value of $400,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $5,000 per year. Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $300,000. Scenic reported net income of $110,000. Placid Lake declared $100,000 in dividends during this period; Scenic paid $40,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic Inventory $ 140,000 $ 90,000 Land 600,000 200,000 Equipment (net) 400,000 300,000 During 2020, intra-entity sales of $90,000 (original cost of $54,000) were made. Only 20 percent of this inventory was still held within the consolidated entity at the end of 2020. In 2021, $120,000 in intra-entity sales were made…
Placid Lake Corporation acquired 80 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2020, when Scenic had a net book value of $400,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $5,000 per year. Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $300,000. Scenic reported net income of $110,000. Placid Lake declared $100,000 in dividends during this period; Scenic paid $40,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic Inventory $ 140,000 $ 90,000 Land 600,000 200,000 Equipment (net) 400,000 300,000 During 2020, intra-entity sales of $90,000 (original cost of $54,000) were made. Only 20 percent of this inventory was still held within the consolidated entity at the end of 2020. In 2021, $120,000 in intra-entity sales were made…
Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2020, when Scenic had a net book value of $500,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $8,000 per year. Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $400,000. Scenic reported net income of $210,000. Placid Lake declared $200,000 in dividends during this period; Scenic paid $50,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic Inventory $ 240,000 $ 100,000 Land 700,000 300,000 Equipment (net) 500,000 400,000 During 2020, intra-entity sales of $125,000 (original cost of $62,000) were made. Only 10 percent of this inventory was still held within the consolidated entity at the end of 2020. In 2021, $190,000 in intra-entity sales were made…
Placid Lake Corporation acquired 80 percent of the outstanding voting stock of Scenic, Ic., on January 1, 2017, when Scenic had a net book value of $540,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $7,000 per year. Placid Lake's 2018 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $440,000. Scenic reported net income of $250,000. Placid Lake declared $130,000 in dividends during this period; Scenic paid $54,000. At the end of 2018, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic Inventory Land $ 280,000 740,000 540,000 $ 104, 000 340,000 440, 000 Equipment (net) During 2017, intra-entity sales of $145,000 (original cost of $70,000) were made. Only 20 percent of this inventory was still held within the consolidated entity at the end of 2017. In 2018, $230,000 in intra-entity sales were made with an original cost of $73,000. Of this…
Placid Lake Corporation acquired 90 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2017, when Scenic had a net book value of $610,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $4,000 per year. Placid Lake's 2018 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $510,000. Scenic reported net income of $320,000. Placid Lake declared $200,000 in dividends during this period; Scenic paid $61,000. At the end of 2018, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic Inventory $ 350,000 $ 111,000 Land 810,000 410,000 Equipment (net) 610,000 510,000 During 2017, intra-entity sales of $180,000 (original cost of $84,000) were made. Only 30 percent of this inventory was still held within the consolidated entity at the end of 2017. In 2018, $300,000 in intra-entity sales were made…
Placid Lake Corporation acquired 90 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2017, when Scenic had a net book value of $580,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $6,000 per year. Placid Lake's 2018 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $480,000. Scenic reported net income of $290,000. Placid Lake declared $170,000 in dividends during this period; Scenic paid $58,000. At the end of 2018, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic Inventory $ 320,000 $ 108,000 Land 780,000 380,000 Equipment (net) 580,000 480,000 During 2017, intra-entity sales of $165,000 (original cost of $78,000) were made. Only 30 percent of this inventory was still held within the consolidated entity at the end of 2017. In 2018, $270,000 in intra-entity sales were made…
Placid Lake Corporation acquired 80 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2017, when Scenic had a net book value of $400,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $5,000 per year.Placid Lake’s 2018 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $300,000. Scenic reported net income of $110,000. Placid Lake declared $100,000 in dividends during this period; Scenic paid $40,000. At the end of 2018, selected figures from the two companies’ balance sheets were as follows: Placid Lake ScenicInventory . . . . .. . $140,000 $90,000 Land . . . . . . . . . . 600,000 200,000Equipment (net) .400,000 300,000 During 2017, intra-entity sales of $90,000 (original cost of $54,000) were made. Only 20 percent of this inventory was still held within the consolidated entity at the end of 2017. In 2018,…
Placid Lake Corporation acquired 80 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2017, when Scenic had a net book value of $400,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $5,000 per year.Placid Lake’s 2018 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $300,000. Scenic reported net income of $110,000. Placid Lake declared $100,000 in dividends during this period; Scenic paid $40,000. At the end of 2018, selected figures from the two companies’ balance sheets were as follows:During 2017, intra-entity sales of $90,000 (original cost of $54,000) were made. Only 20 percent of this inventory was still held within the consolidated entity at the end of 2017. In 2018, $120,000 in intra-entity sales were made with an original cost of $66,000. Of this merchandise, 30 percent had not been resold to outside parties by the end of the year.Each of the following…