1.Please Complete Solution With Details 2.Final Answer Clearly Mentioned 3.Do not give solution in image format Preparing a consolidated income statement-Cost method with noncontrolling interest, AAP andupstream and downstream intercompany inventory profitsA parent company purchased a 70% controlling interest in its subsidiary several years ago. The aggregatefair value of the controlling and noncontrolling interest was $255,000 in excess of the subsidiary'sStockholders' Equity on the acquisition date. This excess was assigned to a building that was estimated tobe undervalued by $153,000 and to an unrecorded Trademark valued at $102,000. The building asset isbeing depreciated over a 10-year period and the Trademark is being amortized over a 6-year period, bothon the straight-line basis with no salvage value. During the current year, the parent and subsidiaryreported a total of $340,000 of intercompany sales. At the beginning of the current year, there were$59,500 of upstream intercompany profits in the parent's inventory. At the end of the current year, therewere $42,500 of downstream intercompany profits in the subsidiary's inventory. During the current year,the subsidiary declared and paid $85,000 of dividends. The parent company uses the cost method of pre-consolidation investment bookkeeping. Each company reports the following income statement for thecurrent year:Income statement:SalesCost of goods soldGross profitIncome (loss) from subsidiaryOperating expensesNet incomeParent Subsidiary$10,200,000 $1,105,000(5,950,000) (552,500)4,250,000 552,50059,500(2,125,000)(314,500)$2,184,500 $238,000a. Starting with the parent's current-year pre-consolidation net income of $2,184,500, compute theamount of current-year net income attributable to the parent that will be reported in the consolidatedfinancial statements.Do not use negative signs with your answers below.Reconciliation of Cost to Equity MethodParent's pre-consolidation net income 2,184,500Dividend Income 59,500P% x Net income of subsidiary 166,600P% x AAP amortization 22,610P% of Upstream profit 41,650Downstream profit 42,500Net income attributable to controlling interest 2,268,140b. Prepare the consolidated income statement for the current year.Do not use negative signs with your answers below.Consolidated Income StatementSales 10,965,000Cost of goods soldGross profitOperating expensesNet incomeNet income attributable to noncontrolling interestsNet income attributable to the parent 2,268,140Just need help solving missing numbers for B. I know it involes adding and subtracting what we aregiven/ waht we found im just not sure which ones.

Consolidated financial statement is the statement that is prepared by the parent company (Acquirer)…

Preparing a consolidated income statement-Cost method with noncontrolling interest, AAP and upstream and downstream intercompany inventory profits A parent company purchased a 70% controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $255,000 in excess of the subsidiary's Stockholders' Equity on the acquisition date. This excess was assigned to a building that was estimated to be undervalued by $153,000 and to an unrecorded Trademark valued at $102,000. The building asset is being depreciated over a 10-year period and the Trademark is being amortized over a 6-year period, both on the straight-line basis with no salvage value. During the current year, the parent and subsidiary total of $240.000 At the beginning there wer

Preparing a consolidated income statement-Cost method with noncontrolling interest, AAP and upstream and downstream intercompany inventory profits A parent company purchased a 70% controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $255,000 in excess of the subsidiary's Stockholders' Equity on the acquisition date. This excess was assigned to a building that was estimated to be undervalued by $153,000 and to an unrecorded Trademark valued at $102,000. The building asset is being depreciated over a 10-year period and the Trademark is being amortized over a 6-year period, both on the straight-line basis with no salvage value. During the current year, the parent and subsidiary total of $240.000 At the beginning there wer

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter14: Intercorporate Investments In Common Stock

Section: Chapter Questions

Problem 20E

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Preparing a consolidated income statement—Cost method with noncontrolling interest, AAP and upstream and downstream intercompany inventory profitsA parent company purchased a 60% controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $140,000 in excess of the subsidiary’s Stockholders’ Equity on the acquisition date. This excess was assigned to a building that was estimated to be undervalued by $90,000 and to an unrecorded Trademark valued at $50,000. The building asset is being depreciated over a 10-year period and the Trademark is being amortized over a 5-year period, both on the straight-line basis with no salvage value. During the current year, the parent and subsidiary reported a total of $250,000 of intercompany sales. At the beginning of the current year, there were $25,000 of upstream intercompany profits in the parent’s inventory. At the end of the current year, there were $20,000 of downstream…
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