The individual financial statements for the two companies as well as consolidated totals for 2021 follow (credit balances indicated by parentheses): Parson Consolidated Syber Company $(558,000) 360,000 94,000 Totals Company 2$ $(1,281,000) 668,000 187,900 Sales Cost of goods sold Operating expenses Income of Syber (880,000) 455,000 92,000 (73,680) Separate company net income 2$ (406,680) $(104,000) (425,100) 18,420 Consolidated net income 2$ Net income attributable to noncontrolling interest $ ( 406,680) Net income attributable to Parson Company Retained earnings, 1/1/21 Net income (above) (535,760) (406,680) 71,000 $(310,000) (104,000) 32,000 (535,760) (406,680) 71,000 2$ 2$ Dividends declared Retained earnings, 12/31/21 $ (871,440) $(382,000) 2$ (871,440) $ 78,000 147,000 Cash and receivables 280,000 192,000 371,760 388,000 2$ 333,000 319,000 $ Inventory Investment in Syber Company Land, buildings, and equipment Trademarks 745,000 24,700 $ 1,421,700 357,000 Total assets $ 1,231,760 $ 582,000 (198,320) (130,000) (32,000) $(122,000) (78,000) Liabilities 2$ (295,320) 2$ (130,000) (32,000) (92,940) (871,440) Common stock Additional paid-in capital Noncontrolling interest in Syber Retained earnings (above) (871,440) (382,000) Total liabilities and equities $(1,231,760) $(582,000) $(1,421,700) a. What method does Parson use to account for investment in Syber? b. What is the balance of the intra-entity inventory gross profit deferred at the end of the current period? c. What amount was originally allocated to the trademarks? d. What is the amount of the current-year intra-entity inventory sales? e. Were the intra-entity inventory sales made upstream or downstream? f. What is the balance of the intra-entity liability at the end of the current year? g. What amount of intra-entity gross profit was deferred from the preceding period and recognized in the current period? h. What was the ending Noncontrolling Interest in Syber Company computed? i. With a tax rate of 21 percent, what income tax journal entry is recorded if the companies prepare a consolidated tax return? j. With a tax rate of 21 percent, what income tax journal entry is recorded if these two companies prepare separate tax returns?
The individual financial statements for the two companies as well as consolidated totals for 2021 follow (credit balances indicated by parentheses): Parson Consolidated Syber Company $(558,000) 360,000 94,000 Totals Company 2$ $(1,281,000) 668,000 187,900 Sales Cost of goods sold Operating expenses Income of Syber (880,000) 455,000 92,000 (73,680) Separate company net income 2$ (406,680) $(104,000) (425,100) 18,420 Consolidated net income 2$ Net income attributable to noncontrolling interest $ ( 406,680) Net income attributable to Parson Company Retained earnings, 1/1/21 Net income (above) (535,760) (406,680) 71,000 $(310,000) (104,000) 32,000 (535,760) (406,680) 71,000 2$ 2$ Dividends declared Retained earnings, 12/31/21 $ (871,440) $(382,000) 2$ (871,440) $ 78,000 147,000 Cash and receivables 280,000 192,000 371,760 388,000 2$ 333,000 319,000 $ Inventory Investment in Syber Company Land, buildings, and equipment Trademarks 745,000 24,700 $ 1,421,700 357,000 Total assets $ 1,231,760 $ 582,000 (198,320) (130,000) (32,000) $(122,000) (78,000) Liabilities 2$ (295,320) 2$ (130,000) (32,000) (92,940) (871,440) Common stock Additional paid-in capital Noncontrolling interest in Syber Retained earnings (above) (871,440) (382,000) Total liabilities and equities $(1,231,760) $(582,000) $(1,421,700) a. What method does Parson use to account for investment in Syber? b. What is the balance of the intra-entity inventory gross profit deferred at the end of the current period? c. What amount was originally allocated to the trademarks? d. What is the amount of the current-year intra-entity inventory sales? e. Were the intra-entity inventory sales made upstream or downstream? f. What is the balance of the intra-entity liability at the end of the current year? g. What amount of intra-entity gross profit was deferred from the preceding period and recognized in the current period? h. What was the ending Noncontrolling Interest in Syber Company computed? i. With a tax rate of 21 percent, what income tax journal entry is recorded if the companies prepare a consolidated tax return? j. With a tax rate of 21 percent, what income tax journal entry is recorded if these two companies prepare separate tax returns?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 11P
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