Plug Products owns 80 percent of the stock of Spark Filter Company, which it acquired at underlying book value on August 30, 20X6.At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Spark Filter. Summarized trialbalance data for the two companies as of December 31, 20X8, are as follows:Cash and Accounts ReceivableInventoryBuildings and Equipment (net)Investment in Spark Filter CompanyCost of Goods SoldDepreciation ExpenseCurrent LiabilitiesCommon StockRetained EarningsSalesIncome from Spark Filter CompanyTotalNoABCEntry123Plug ProductsCredit$ 154,000232,000285,000On January 1, 20X8, Plug's inventory contained filters purchased for $63,000 from Spark Filter, which had produced the filters for$43,000. In 20X8, Spark Filter spent $103,000 to produce additional filters, which it sold to Plug for $150,907. By December 31, 20X8,Plug had sold all filters that had been on hand January 1, 20X8, but continued to hold in inventory $45,272 of the 20X8 purchase fromSpark Filter.Noncontrolling interest260,428170,00035,000Required:a. Prepare all consolidation entries needed to complete a consolidation worksheet for 20X8.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.Sales$ 1,136,428Cost of goods soldInventoryConsolidated net incomeIncome assigned to the controlling interestCommon stockRetained earningsIncome from Spark Filter CompanyNCI in Net Income of Spark Filter CompanyAccountsInvestment in Spark Filter CompanyNCI in Net assets of Spark Filter CompanyInvestment in Spark Filter CompanyNCI in Net assets of Spark Filter CompanyCost of goods soldDebitX Answer is not complete.$184,893196,000462,000253,90739,628$ 1,136,428›› › › ››✓Spark Filter CompanyCreditDebit✓$ 91,000120,000192,000✓135,00025,000$ 563,000$ 63,09385,000211,000203,907$ 563,000Debit85,000✔211,000✔39,628✔b. Compute consolidated net income and income assigned to the controlling interest in the 20X8 consolidated income statement.Creditc. Compute the balance assigned to the noncontrolling interest in the consolidated balance sheet as of December 31, 20X8.

Consolidation is an activity in which financial statements of a parent and its subsidiary should be…

Plug Products owns 80 percent of the stock of Spark Filter Company, which it acquired at underlying book value on August 30, 20X6. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Spark Filter. Summarized trial balance data for the two companies as of December 31, 20X8, are as follows: Cash and Accounts Receivable Inventory Buildings and Equipment (net) Investment in Spark Filter Company Cost of Goods Sold Depreciation Expense Current Liabilities Common Stock Retained Earnings Sales Income from Spark Filter Company Plug Products Credit $ 154,000 232,000 285,000 260,428 170,000 35,000 Debit $ 184,893 196,000 462,000 253,907 39.628 Spark Filter Company Credit Debit $ 91,000 120,000 192,000 135,000 25,000 $ 63,093 85,000 211,000 203,907

Plug Products owns 80 percent of the stock of Spark Filter Company, which it acquired at underlying book value on August 30, 20X6. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Spark Filter. Summarized trial balance data for the two companies as of December 31, 20X8, are as follows: Cash and Accounts Receivable Inventory Buildings and Equipment (net) Investment in Spark Filter Company Cost of Goods Sold Depreciation Expense Current Liabilities Common Stock Retained Earnings Sales Income from Spark Filter Company Plug Products Credit $ 154,000 232,000 285,000 260,428 170,000 35,000 Debit $ 184,893 196,000 462,000 253,907 39.628 Spark Filter Company Credit Debit $ 91,000 120,000 192,000 135,000 25,000 $ 63,093 85,000 211,000 203,907

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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