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A: Answer - 229,700
Alford Company and its 80 percent–owned subsidiary, Knight, have the following income statements for 2021:
| Alford | Knight | ||||||
| Revenues | $ | (500,000 | ) | $ | (230,000 | ) | |
| Cost of goods sold | 300,000 | 140,000 | |||||
| Depreciation and amortization | 40,000 | 10,000 | |||||
| Other expenses | 20,000 | 20,000 | |||||
| Gain on sale of equipment | (30,000 | ) | 0 | ||||
| Equity in earnings of Knight | (36,200 | ) | 0 | ||||
| Net income | $ | (206,200 | ) | $ | (60,000 | ) | |
Additional Information for 2021
- Intra-entity inventory transfers during the year amounted to $90,000. All intra-entity transfers were downstream from Alford to Knight.
- Intra-entity gross profits in inventory at January 1 were $6,000, but at December 31, they are $9,000.
- Annual excess amortization expense resulting from the acquisition is $11,000.
- Knight paid dividends totaling $20,000.
- The noncontrolling interest's share of the subsidiary's income is $9,800.
- During the year, consolidated inventory rose by $11,000 while accounts receivable and accounts payable declined by $8,000 and $6,000, respectively.
Using either the direct or indirect method, compute net cash flows from operating activities during the period for the business combination.
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- Fisafolia Corporation has gross income from operations of $210,000 and operating expenses of $160,000 for 2019. The corporation also has $30,000 in dividends from publicly traded domestic corporations in which the ownership percentage was 45 percent. Calculate the corporation's dividends received deduction for 2019. $_____________ Assume that instead of $210,000, Fisafolia Corporation has gross income from operations of $135,000. Calculate the corporation's dividends received deduction for 2019. $___________ Assume that instead of $210,000, Fisafolia Corporation has gross income from operations of $158,000. Calculate the corporation's dividends received deduction for 2019. $_____________Alford Company and its 80 percent-owned subsidiary, Knight, have the following income statements for 2021: Knight $ (230,000) Alford $ (500,000) 300,000 40,000 140,000 10,000 20,000 20,000 (30,000) (36,200) $ (206, 200) Revenues Cost of goods sold Depreciation and amortization Other expenses Gain on sale of equipment Equity in earnings of Knight Net income 0 0 $ (60,000) Additional Information for 2021 • Intra-entity inventory transfers during the year amounted to $90,000. All intra-entity transfers were downstream from Alford to Knight. • Intra-entity gross profits in inventory at January 1 were $6,000, but at December 31, they are $9,000. • Annual excess amortization expense resulting from the acquisition is $11,000. • Knight paid dividends totaling $20,000. • The noncontrolling interest's share of the subsidiary's income is $9,800. . During the year, consolidated inventory rose by $11,000 while accounts receivable and accounts payable declined by $8,000 and $6,000, respectively. Net…Denzel Co. acquired inventories on May 1, 2021 from its 70% owned subsidiary, Martin Company. The inventories were sold for P188,000, including the 25% mark up on cost. Out of these inventories, 65% were sold to outsiders. During 2022, Denzel Co. reported net income of P430,000 and Martin Co. reported net income of P280,000. How much is the realized profit to be allocated to non-controlling interest in 2022?
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