A parent company purchased an 80% interest in its subsidiary several years ago with no AAP (i.e., purchased at book value). Each reports the following income statement for t Parent Subsidiary Income statement: Sales $25,000,000 $3,750,000 Cost of goods sold 17,500,000 2,250,000 Gross profit 7,500,000 1,500,000 420,000 Income (loss) from subsidiary 0 Operating expenses 4,750,000 975,000 Net income $3,170,000 $525,000 a. Compute the Income (loss) from subsidiary of $420,000 reported by the parent company. + $ 0 ♦ 0% Income (loss) from subsidiary $ 0 b. Prepare the consolidated income statement for the current year. Do not use negative signs with your answers. Consolidated Income Statement Sales 0 Cost of goods sold 0 Gross profit 0 0 Income (loss) from subsidiary Operating expenses 0 ♦ + f the question 0 0 0

A parent company purchased an 80% interest in its subsidiary several years ago with no AAP (i.e., purchased at book value). Each reports the following income statement for t Parent Subsidiary Income statement: Sales $25,000,000 $3,750,000 Cost of goods sold 17,500,000 2,250,000 Gross profit 7,500,000 1,500,000 420,000 Income (loss) from subsidiary 0 Operating expenses 4,750,000 975,000 Net income $3,170,000 $525,000 a. Compute the Income (loss) from subsidiary of $420,000 reported by the parent company. + $ 0 ♦ 0% Income (loss) from subsidiary $ 0 b. Prepare the consolidated income statement for the current year. Do not use negative signs with your answers. Consolidated Income Statement Sales 0 Cost of goods sold 0 Gross profit 0 0 Income (loss) from subsidiary Operating expenses 0 ♦ + f the question 0 0 0

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter5: Corporations: Earnings & Profits And Dividend Distributions

Section: Chapter Questions

Problem 31P

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Meadows Company purchased a 80% interest in Szot Company five years ago with no AAP (i.e., purchased at book value). Each reports the following income statement for the current year: Income Statement Meadows Szot Sales $9,000,000 $750,000 Cost of goods sold -4,200,000 -260,000 Gross Profit 4,800,000 490,000 Income (loss) from subsidiary 112,000 Operating expenses -2,500,000 -350,000 Net income $2,412,000 $140,000 Required: a. Compute the income (loss) from subsidiary of $112,000 reported by the Meadows Company.b. Prepare the consolidated income statement for the current year.
On January 1, 2009, BANG BANG Co. purchased 80% of BANGITY BANG Co.'s outstanding stock for $620,000. At that date, all of BANGITY BANG's assets and liabilities had market values approximately equal to their book values and no goodwill was included in the purchase price. The following information was available for 2009: Income from own operations of Parent-$150,000 Operating Loss of Subsidiary-$20,000 Dividends paid in 2013 by parent-$75,000 Dividends paid by Subsidiary to Parent-$12,000. On July 1 ,2009, there was a downstream sale of equipment at a gain of $25,000. The equipment is expected to have a remaining useful life of 10 years from the date of sale. Also, on January 1, 2009, there was an upstream sale of furniture at a loss of $7,500. The furniture is expected to have a useful life of five years from the date of sale. Non-controlling interest is measured at fair value. Determine the consolidated net income attributable to the parent shareholders' equity.
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