Sunny Company acquired 80 percent ownership of Albert Company's voting shares on January 1, 20X2 with no differential. During 20X5, Sunny purchased inventory for $64,000 and sold the full amount to Albert Company for $80,000. On December 31, 20X5, Albert's ending inventory included $25,000 of items purchased from Sunny. In addition, in 20X5, Albert purchased inventory for $80,000 and sold the units to Sunny for $120,000. Sunny included $30,000 of its purchase from Albert in ending inventory on December 31, 20X5. For 20X5, Suni ported $260,000 income from its operations. Albert reported $200,000 of net income. Assume Sunny uses the fully adjusted equity method. The following selected account balances are from the individual financial records of these two companies as of December 31, 20X5: Sales Cost of goods sold Inventory Sunny Albert $900,000 $600,000 540,000 350,000 240,000 120,000 Answer the following questions: (Do not add dollar sign; do not add comma to your amount; round the answer to the whole number) 1. What amount unrealized inventory profit exists in Albert's inventory at the end of year 20X5? 2. What amount of unrealized inventory profit exists in Sunny's inventory at the end of year 20X5? 3. What is the amount of Income from Albert reported on Sunny's book for year 20X5? 4. What amount of income will be assigned to the noncontrolling interest in the 20X5 consolidated income statement? 5. What amount of sales will be reported in the 20X5 consolidated income statement? 6. What amount of cost of goods sold will be reported in the 20X5 consolidated income statement? 7. What inventory balance will be reported by the consolidated entity on December 31, 20X5?

Plump Corporation holds 60 percent ownership of Slim Company. Each year, Slim purchases large quantities of a gnarl root used in producing health drinks. Slim purchased $150,000 of roots in 20X7 and sold $40,000 of these purchases to Plump for $60,000. By the end of 20X7, Plump had resold all but $15,000 of its purchase from Slim. Plump generated $90,000 on the sale of roots to various health stores during the year. Required: a. Prepare the journal entries recorded by Plump and Slim during 20X7 relating to the initial purchase, intercorporate sale, and resale of gnarl roots. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entries recorded by Slim Company: Answer is complete and correct. No Event General Journal Debit Credit A Inventory 150,000 Cash (Accounts payable) 150,000 B 2 Cash (Accounts receivable) Sales 60,000 60,000 C 3 Cost of goods-sold Inventory Journal entries recorded by Plump Corporation:…

Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $108,500. At that date, the noncontrolling interest had a fair value of $46,500 and Soda reported $70,000 of common stock outstanding and retained earnings of $30,000. The differential is assigned to buildings and equipment, which had a fair value $20,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $35,000 higher than book value and a remaining life of five years at the date of the business combination. Trial balances for the companies as of December 31, 20X3, are as follows:    Pop Corporation   Soda Company   Item   Debit   Credit   Debit   Credit   Cash & Accounts Receivable   $ 15,400           $ 21,600             Inventory     165,000             35,000             Land     80,000             40,000             Buildings & Equipment     340,000             260,000             Investment in Soda Company…

Franklin purchases 40 percent of Johnson Company on January 1 for $621,200. Although Franklin did not use it, this acquisition gave Franklin the ability to apply significant influence to Johnson’s operating and financing policies. Johnson reports assets on that date of $1,505,000 with liabilities of $536,000. One building with a seven-year remaining life is undervalued on Johnson’s books by $276,500. Also, Johnson’s book value for its trademark (10-year remaining life) is undervalued by $307,500. During the year, Johnson reports net income of $177,000 while declaring dividends of $110,000. What is the Investment in Johnson Company balance (equity method) in Franklin’s financial records as of December 31?