Sweeny Corporation owns 60 per cent of Bitner Company's shares. Partial 20X2 financial data for the companies and consolidated entity were as follows: Sweeny Corporation Bitner Company Consolidated Totals Sales $550,000 $450,000 $820,000 Cost of Goods Sold 310,000 300,000 420,000 Inventory, Dec. 31 180,000 210,000 375,000 On January 1, 20X2, Sweeny's inventory contained items purchased from Bitner for $75,000. The cost of the units to Bitner was $50,000. Bitner made all intercorporate sales during 20X2 to Sweeny. Required: 1. What amount of intercorporate sales occurred in 20X2? 2. How much unrealized intercompany profit existed on January 1, 20X2? On December 31, 20X2? 3. Give the worksheet consolidation entries relating to inventory and cost of goods sold needed to prepare consolidated financial statements for 20X2 4. If Bitner reports a net income of $90,000 for 20X2, what amount of income is assigned to the noncontrolling interest in the 20X2 consolidated income statement

Sweeny Corporation owns 60 per cent of Bitner Company's shares. Partial 20X2 financial data for the companies and consolidated entity were as follows: Sweeny Corporation Bitner Company Consolidated Totals Sales $550,000 $450,000 $820,000 Cost of Goods Sold 310,000 300,000 420,000 Inventory, Dec. 31 180,000 210,000 375,000 On January 1, 20X2, Sweeny's inventory contained items purchased from Bitner for $75,000. The cost of the units to Bitner was $50,000. Bitner made all intercorporate sales during 20X2 to Sweeny. Required: 1. What amount of intercorporate sales occurred in 20X2? 2. How much unrealized intercompany profit existed on January 1, 20X2? On December 31, 20X2? 3. Give the worksheet consolidation entries relating to inventory and cost of goods sold needed to prepare consolidated financial statements for 20X2 4. If Bitner reports a net income of $90,000 for 20X2, what amount of income is assigned to the noncontrolling interest in the 20X2 consolidated income statement

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter22: S Corporations

Section: Chapter Questions

Problem 4BCRQ

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Sweeny Corporation owns 60 percent of Bitner Company's shares. Partial 20X2 financial data for the companies and consolidated entity were as follows: Sweeny Corporation Bitner Company Consolidated Totals Sales $550,000 $450,000 $820,000 Cost of Goods Sold 310,000 300,000 420,000 Inventory, Dec. 31 180,000 210,000 375,000 On January 1, 20X2, Sweeny's inventory contained items purchased from Bitner for $75,000. The cost of the units to Bitner was $50,000. Bitner made all intercorporate sales during 20X2 to Sweeny. Required: What amount of intercorporate sales occurred in 20X2? How much unrealized intercompany profit existed on January 1, 20X2? On December 31, 20X2? Give the worksheet consolidation entries relating to inventory and cost of goods sold needed to prepare consolidated financial statements for 20X2. If Bitner reports a net income of $90,000 for 20X2, what amount of income is assigned to the noncontrolling interest in the 20X2…
On January 1, 20X2, Plend Corporation acquired all of Stork Corporation's assets and liabilities by issuing shares of its common stock. Partial balance sheet data for the companies prior to the business combination and immediately following the combination are as follows: Plend Corporation Stork Corporation Combined Entity Book Value Book Value Assets Cash $ 52,000 $ 22,000 $ 74,000 Accounts Receivable 72,000 42,000 112,000 Inventory 62,000 47,000 120,000 Buildings and Equipment (net) 312,000 122,000 454,000 Goodwill ? Total Assets $ 498,000 $ 233,000 $ ? Liabilities and Equities Accounts Payable $ 44,000 $ 26,000 $ 70,000 Bonds Payable 162,000 82,000 244,000 Bond Premium 6,000 6,000 Common Stock, $5 par 112,000 52,000 139,500 Additional Paid-In Capital 77,000 40,000 335,500 Retained Earnings 97,000 33,000 ? Total Liabilities and Equities $ 498,000 $ 233,000 $ ? Required: What number of shares did Plend issue to acquire…
On January 1, 20X2, Plend Corporation acquired all of Stork Corporation's assets and liabilities by issuing shares of its common stock. Partial balance sheet data for the companies prior to the business combination and immediately following the combination are as follows: Plend Corporation Stork Corporation Combined Entity Book Value Book Value Assets Cash $ 52,000 $ 22,000 $ 74,000 Accounts Receivable 72,000 42,000 112,000 Inventory 62,000 47,000 120,000 Buildings and Equipment (net) 312,000 122,000 454,000 Goodwill ? Total Assets $ 498,000 $ 233,000 $ ? Liabilities and Equities Accounts Payable $ 44,000 $ 26,000 $ 70,000 Bonds Payable 162,000 82,000 244,000 Bond Premium 6,000 6,000 Common Stock, $5 par 112,000 52,000 139,500 Additional Paid-In Capital 77,000 40,000 335,500 Retained Earnings 97,000 33,000 ? Total Liabilities and Equities $ 498,000 $ 233,000 $ ? 1.What was the total market value of the shares issued by…
On Jan 1, 20X8, Banawe Company purchased 80% of the outstanding shares of Malate Company at a cost of P4,000,000. On that date, Malate had P2,500,000 of capital stock and P3,500,000 of retained earnings. For 20X8, Banawe had income of P1,400,000 form its separate operations and paid dividends of P750,000. Malate on the other hand reported income of P325,000 and paid dividends of P150,000 on December 1, 20X8. All the assets and liabilities of Malate have book values equal to their fair market values. Assume all income was earned evenly throughout the year except for an intercompany transaction on October 1, 20X8 when Banawe purchased a machinery from Malate for P500,000. The book value of the machinery on that date amounted to P600,000 and accumulated depreciation of P400,000 and is already reflected in the income of Malate indicated above. The machinery is expected to have a remaining useful life of 5 years from the date of sale. In the December 31, 20X8 consolidated financial…
On Jan 1, 20X8, Banawe Company purchased 80% of the outstanding shares of Malate Company at a cost of P4,000,000. On that date, Malate had P2,500,000 of capital stock and P3,500,000 of retained earnings. For 20X8, Banawe had income of P1,400,000 form its separate operations and paid dividends of P750,000. Malate on the other hand reported income of P325,000 and paid dividends of P150,000 on December 1, 20X8. All the assets and liabilities of Malate have book values equal to their fair market values. Assume all income was earned evenly throughout the year except for an intercompany transaction on October 1, 20X8 when Banawe purchased a machinery from Malate for P500,000. The book value of the machinery on that date amounted to P600,000 and accumulated depreciation of P400,000 and is already reflected in the income of Malate indicated above. The machinery is expected to have a remaining useful life of 5 years from the date of sale. In the December 31, 20X8 consolidated financial…
On Jan 1, 20X8, Banawe Company purchased 80% of the outstanding shares of Malate Company at a cost of P4,000,000. On that date, Malate had P2,500,000 of capital stock and P3,500,000 of retained earnings. For 20X8, Banawe had income of P1,400,000 form its separate operations and paid dividends of P750,000. Malate on the other hand reported income of P325,000 and paid dividends of P150,000 on December 1, 20X8. All the assets and liabilities of Malate have book values equal to their fair market values. Assume all income was earned evenly throughout the year except for an intercompany transaction on October 1, 20X8 when Banawe purchased a machinery from Malate for P500,000. The book value of the machinery on that date amounted to P600,000 and accumulated depreciation of P400,000 and is already reflected in the income of Malate indicated above. The machinery is expected to have a remaining useful life of 5 years from the date of sale. In the December 31, 20X8 consolidated financial…
On July 1, 20x6 TRUST Company purchased 80% of the outstanding shares of DUREX Company at a cost of Pl,600,000. on that date, DUREX had P1,000,000 of capital stock and P1,400,0a00 of retained earnings. For 20x6, TRUST had income of P560,000 from its separate operations and paid dividends of P300,000. For 20x6, DUREX reported income of P130,000 and paid dividends of P60,000. All the assets and liabilities of DUREX have book values equal to their respective fair market values. Assume income was earned evenly throughout the year except for the intercompany transaction on October 1. On October 1, TRUST purchased an equipment from DUREX for P200,000. The book value of the equipment on that date was P240,000. The loss of P40,000 is reflected in the income of DUREX indicated above. The equipment is expected to have a useful life of 5 years from the date of sale. In the December 31, 20x6 consolidated statement of financial position, how much is the consolidated net income attributable to the…
Pamrod Manufacturing acquired all the assets and liabilities of Stafford Industries on January 1, 20X2, in exchange for 4,100 shares of Pamrod’s $20 par value common stock. Balance sheet data for both companies just before the merger are given as follows: Pamrod Manufacturing Stafford Industries Balance Sheet Items Book Value Fair Value Book Value Fair Value Assets Cash $ 84,000 $ 84,000 $ 30,000 $ 30,000 Accounts Receivable 103,000 103,000 56,000 56,000 Inventory 215,000 376,000 112,000 153,000 Land 59,000 89,000 49,000 26,000 Buildings and Equipment 608,000 542,000 402,000 344,000 Less: Accumulated Depreciation (236,000 ) (141,000 ) Total Assets $ 833,000 $ 1,194,000 $ 508,000 $ 609,000 Liabilities and Equities Accounts Payable $ 66,000…
Punch Manufacturing Corporation owns 80 percent of the common shares of Short Retail Stores. The companies’ balance sheets as of December 31, 20X4, were as follows: Punch ManufacturingCorporation ShortRetail Stores Assets Cash $ 57,000 $ 37,000 Accounts Receivable 106,000 86,000 Inventory 250,000 140,000 Land 105,000 75,000 Buildings and Equipment 520,000 350,000 Less: Accumulated Depreciation (250,000 ) (140,000 ) Investment in Short Retail Stores 128,000 Total Assets $ 916,000 $ 548,000 Liabilities and Equity Accounts Payable $ 86,000 $ 88,000 Bonds Payable 270,000 200,000 Preferred Stock ($10 par value) 200,000 100,000 Common Stock: $10 par value 150,000 $5 par value 100,000 Retained…
On 1 January 20X3 Westbridge acquired all of Brookfield's 100,000 $1 shares for $300,000. The goodwill acquired in the business combination was $40,000, of which 50% had been written off as impaired by 31 December 20X5. On 31 December 20X5 Westbridge sold all of Brookfield's shares for $450,000 when Brookfield had retained earnings of $185,000. What is the profit on disposal that should be included in the individual entity financial statements of Westbridge?
On June 30, 20X1, Naeder Corporation purchased for cash at $10 per share all 100,000 shares of the outstanding common stock of the Tedd Company. The total fair value of all identifiable net assets of Tedd was $1,400,000. The only noncurrent asset is property with a fair value of $350,000. The consolidated balance sheet of Naeder and its wholly owned subsidiary on June 30, 20X1, should report a. a retained earnings balance that is inclusive of a gain of $400,000. b. goodwill of $400,000. c. a retained earnings balance that is inclusive of a gain of $350,000. d. a gain of $400,000
The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company: Burks Foreman Revenues $ (400,000 ) $ (300,000 ) Expenses 290,000 225,000 Gain on sale of equipment 0 (15,000 ) Equity earnings of subsidiary (52,000 ) 0 Net income $ (162,000 ) $ (90,000 ) Outstanding common shares 50,000 30,000 Additional Information Amortization expense resulting from Foreman’s excess acquisition-date fair value is $25,000 per year. Burks has convertible preferred stock outstanding. Each of these 5,000 shares is paid a dividend of $4 per year. Each share can be converted into four shares of common stock. Stock warrants to buy 10,000 shares of Foreman are also outstanding. For $20, each warrant can be converted into a share of Foreman’s common stock. The fair value of this stock is $25 throughout the year. Burks owns none of these warrants. Foreman has convertible bonds payable that…

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	Sweeny Corporation	Bitner Company	Consolidated Totals
Sales	$550,000	$450,000	$820,000
Cost of Goods Sold	310,000	300,000	420,000
Inventory, Dec. 31	180,000	210,000	375,000