P Company owns 70% of S Company’s common stocks acquired on January 1, 2016. S regularly sells merchandise to P at 150% of its cost. P’s December 31, 2016 and 2017 inventories include goods purchased inter-company of P450,000 and P132,000, respectively. The separate incomes of the affiliates are summarized as follows: (Year 2017) P S Sales 4,800,000 3,200,000 Cost of Sales (2,400,000) (2,000,000) Operating Expenses (1,600,000) (400,000) Separate Incomes 800,000 800,000 What is the consolidated net income attributable to minority interest for 2017?

P Company owns 70% of S Company’s common stocks acquired on January 1, 2016. S regularly sells merchandise to P at 150% of its cost. P’s December 31, 2016 and 2017 inventories include goods purchased inter-company of P450,000 and P132,000, respectively. The separate incomes of the affiliates are summarized as follows: (Year 2017) P S Sales 4,800,000 3,200,000 Cost of Sales (2,400,000) (2,000,000) Operating Expenses (1,600,000) (400,000) Separate Incomes 800,000 800,000 What is the consolidated net income attributable to minority interest for 2017?

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

See similar textbooks

Similar questions

Sun Corporation, a 75 percent–owned subsidiary of Pam Corporation, sells inventory items to its parent at 125 percent of cost. Inventories of the two affiliates for 2016 are as follows: Pam Sun Beginning inventory $400,000 $250,000 Ending inventory 500,000 200,000 Pam’s beginning and ending inventories include merchandise acquired from Sun of $150,000 and $200,000, respectively, which is sold in the following year. If Sun reports net income of $300,000 for 2016, Pam’s income from Sun will be: $255,000 $217,500 $215,000 $195,000
Sorel is an 80%-owned subsidiary of Pattern Company. The two affiliates had the following separate income statements for 2015 and 2016. (attached)Sorel sells at the same gross profit percentage to all customers. During 2015, Sorel sold goods to Pattern for the first time in the amount of $120,000. $30,000 of these sales remained in Pattern’s ending inventory. During 2016, sales to Pattern by Sorel were $150,000, of which $25,000 sales were still in Pattern’s December 31, 2016, inventory.Prepare consolidated income statements including the distribution of income to the controlling and noncontrolling interests for 2015 and 2016.
Refer to the preceding facts for Panther’s acquisition of Sandin common stock. On January 1, 2016, Sandin held merchandise sold to it from Panther for $20,000. During 2016, Panther sold merchandise to Sandin for $100,000. On December 31, 2016, Sandin held $25,000 of this merchandise in its inventory. Panther has a gross profit of 30%. Sandin owed Panther $15,000 on December 31 as a result of this intercompany sale. On January 1, 2015, Sandin sold equipment to Panther at a profit of $24,000. Panther also sold some fixed assets to nonaffiliates. Depreciation is computed over a 6-year life, using the straight-line method. 1. Prepare a value analysis and a determination and distribution of excess schedule for the investment in Sandin. 2. Complete a consolidated worksheet for Panther Company and its subsidiary Sandin Company as of December 31, 2016. Prepare supporting amortization and income distribution schedules.
Pam Corporation acquired its 90 percent interest in Sun Corporation at its book value of $3,600,000on January 1, 2016, when Sun had capital stock of $3,000,000 and retained earnings of $1,000,000.The December 31, 2016 and 2017, inventories of Pam included merchandise acquired from Sunof $300,000 and $400,000, respectively. Sun realizes a gross profit of 40 percent on all merchandisesold. During 2016 and 2017, sales by Sun to Pam were $600,000 and $800,000, respectively.Summary adjusted trial balances for Pam and Sun at December 31, 2017, follow (inthousands): Pam SunCash $ 1,000 $ 200Receivables—net 2,000 500Inventories 2,400 1,000Plant assets—net 2,500 4,800Investment in Sun—90% 4,356 —Cost of sales 8,000 3,900Other expenses 3,400 1,600Dividends 1,000 500$24,656 $ 12,500Pam SunAccounts payable $ 1,500 $ 900Other liabilities 600 600Capital stock, $10 par 5,000 3,000Retained earnings 3,692 1,500Sales 13,000 6,500Income from Sun 864 —$24,656 $12,500
On January 2, 2016, PARENT Company acquired 90% of the outstanding shares of SUBSIDIARY Company at book value. During 2016 and 2017, intercompany sales amounted to $2,000,000 and $4,000,000 respectively. SUBSIDIARY Company consistently recognized a 25% mark up based on sales while PARENT Company had a 25% gross profit on cost. The inventories of the buying affiliate, which all came from intercompany trasactions show: Dec. 31, 2016 Dec. 31, 2017 PARENT Company 240,000 160,000 SUBSIDIARY Company 100,000 40,000 On October 1, 2016, PARENT Company purchased a piece of land costing $1,000,000 from SUBSIDIARY Company for $1,500,000. On December 31, 2017, PARENT Company sold this land to an unrelated paty for $1,500,000. On the other hand, on July 1, 2017, PARENT Company sold a used machine with a carrying value of $60,000 and remaining life of 3 years to SUBSIDIARY Company for $42,000. Separate Statement of Comprehensive Income for the two companies for 2017 follow: PARENT…
Baba Plc has owned 100% of the issued share capital of Onua Plc for many years. Baba Plcsells goods to Onua Plc at cost plus 20%. The following information is available for the year ended 31 December 2018.Revenue GH¢Baba Plc 230,000Onua Plc 60,000During the year Baba Plc sold goods to Onua Plc for GH¢30,000, of which GH¢9,000 were still held in inventory by Onua Plc at the year end.At what amount should total revenue appear in the consolidated statement of profit or loss?
KK Co. holds 90% of the common stock of LL Co. During 20x2, KK reported sales of P1,120,000 and cost of goods sold of P840,000. For this same period, LL had sales of P420,000 and cost of goods sold of P252,000. Also during 20x2, KK sold merchandise to LL for P140,000. The subsidiary still possesses 40% of this inventory at the end of 20x2. KK had established the transfer price based on its normal markup. What are consolidated sales?
Company S is 80% owned by Company P. Near the end of 2015, Company S sold merchandise with a cost of $6,000 to Company P for $7,000. Company P sold the merchandise to a nonaffiliated firm in 2016 for $10,000. How much total profit should be recorded on the consolidated income statements in 2015 and 2016? How much profit should be awarded to the controlling and noncontrolling interests in 2015 and 2016?
Alford Company and its 80 percent–owned subsidiary, Knight, have the following income statements for 2018:Additional Information for 2018• 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.
GG Co. had the following transactions with two subsidiaries, OO and RR during 2020: Sales of P105,000 to OO, Inc., with P31,500 gross profit, OO had P26,250 of this inventory on hand at year end. Purchases of raw materials totaling P420,000 from RR Corp., a wholly owned subsidiary. RR’s gross profit on the sale was P84,000. GG had P98,000 of this inventory remaining on December 31, 2020. Before eliminating entries, GG had combined current assets of P525,000. What amount should GG report in its December 31, 2020 consolidated financial position for current assets?
On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? Group of answer choices P1,060,000 Cr. P1,035,000 Cr. No entry P40,000 Dr.
On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? Group of answer choices a. P40,000 Dr. b. No entry c. P1,035,000 Cr. d. P1,060,000 Cr.