Upstream Sales LO 2 LO 5 Shell Company, an 85% owned subsidiary of Plaster Company, sells merchandise to Plaster Company at a markup of 20% of selling price. During 2019 and 2020, intercompany sales amounted to $442,500 and $386,250, respectively. At the end of 2019, Plaster had one-half of the goods that it purchased that year from Shell in its ending inventory. Plaster's 2020 ending inventory contained one-fifth of that year's purchases from Shell. There were no intercompany sales prior to 2019. Plaster had net income in 2019 of $750,000 from its own operations and in 2020 its independent income was $780,000. Shell reported net income of $322,500 and $335.400 for 2019 and 2020, respectively. Required: A. Prepare in general journal form all entries necessary on the consolidated financial statement workpapers to eliminate the effects of the intercompany sales for each of the years 2019 and 2020. B. Calculate the amount of noncontrolling interest to be deducted from consolidated income in the consolidated income statement for 2020. C. Calculate controlling interest in consolidated income for 2020.

Upstream Sales LO 2 LO 5 Shell Company, an 85% owned subsidiary of Plaster Company, sells merchandise to Plaster Company at a markup of 20% of selling price. During 2019 and 2020, intercompany sales amounted to $442,500 and $386,250, respectively. At the end of 2019, Plaster had one-half of the goods that it purchased that year from Shell in its ending inventory. Plaster's 2020 ending inventory contained one-fifth of that year's purchases from Shell. There were no intercompany sales prior to 2019. Plaster had net income in 2019 of $750,000 from its own operations and in 2020 its independent income was $780,000. Shell reported net income of $322,500 and $335.400 for 2019 and 2020, respectively. Required: A. Prepare in general journal form all entries necessary on the consolidated financial statement workpapers to eliminate the effects of the intercompany sales for each of the years 2019 and 2020. B. Calculate the amount of noncontrolling interest to be deducted from consolidated income in the consolidated income statement for 2020. C. Calculate controlling interest in consolidated income for 2020.

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

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 9P: LIFO Liquidation Profit Hammond Company adopted LIFO when it was formed on January 1, 2017. Since...

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E 5-6 Upstream and downstream sales Pam Corporation owns 70 percent of Sun Company’s common stock, acquired January 1, 2017. Patents from the investment are being amortized at a rate of $20,000 per year. Sun regularly sells merchandise to Pam at 150 percent of Sun’s cost. Pam’s December 31, 2017, and 2018 inventories include goods purchased intercompany of $112,500 and $33,000, respectively. The separate incomes (do not include investment income) of Pam and Sun for 2018 are summarized as follows: Pam Sun Sales $1,200,000 $800,000 Cost of sales (600,000) (500,000) Other expenses (400,000) (100,000) Separate incomes $ 200,000 $200,000 Total consolidated income should be allocated to controlling and noncontrolling interest shares in the amounts of: $344,550 and $61,950, respectively $358,550 and $60,000, respectively $346,500 and $60,000, respectively…
2.) On January 3, 2019 Abracada acquired 90% of Deli Co. at book value. The following information is available: 2020 2019 Ending inventory 60,000 40,000 Intercompany Cost of Goods sold 120,000 120,000 Downstream sale 240,000 200,000 Net income - Deli Co. 450,000 400,000 Net income - Abracada Co. 1,100,000 1,000,000 What is the profit attributable to equity holders of parent or Controlling Interest in Net Income for 2020?
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40.Allapacan Company had the following consignment transactions during 2020: Inventory shipped on consignment to Benguet Company, consignee P600,000 Freight paid by Allapacan 50,000 Inventory received on consignment from Ifugao, consignor 800,000 Freight paid by Ifugao 50,000 No sales of consigned goods were made through December 31, 2020. In its December 31, 2020 balance sheet, Allapacan should include consigned inventory of ?
Dollar-Value LIFO and Inventory Pools Webster Company adopted dollar-value LIFO on January 1, 2019. Webster produces three products: X, Y, and Z. Webster's beginning inventory consisted of the following: Type Quantity Cost perUnit Total Cost X 30,000 $4.25 $127,500 Y 10,000 3.50 35,000 Z 25,000 2.00 50,000 65,000 $212,500 During 2019, Webster had the following purchases and sales: Type QuantityPurchased Cost PerUnit QuantitySold Selling Priceper Unit X 110,000 $4.75 90,000 $10.00 Y 100,000 3.75 85,000 7.50 Z 75,000 2.10 70,000 5.00 285,000 245,000 Required: 1. Compute the LIFO cost of the ending inventory assuming Webster uses a single inventory pool. Round cost index to four decimal places.$
15. Northridge, Inc., buys 40% of Matador Company on January 1, 2019. for $550,000. The equity method of accounting is to be used, Matador's net assets on that date were $1.2 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Matador immediately begins supplying inventory to Northridge as follows: Amount Held by Northridge Year Cost to Matador Transfer Price At Year End (at transfer price)2019 $70,000 $100,000 $25,0002020 $96,000 $150,000 $45,000Inventory held at the end of one year by Northridge is sold at the beginning of the next. Matador reports net income of $100,000 in 2019 and $150.000 in 2020 and declares (and pays)…
PP Co. regularly sells merchandise to its 80%-owned subsidiary, SS Co. In 2021, PP sold merchandise to SS that cost P64,000 for P80,000. Half of the merchandise remained in the inventory of SS as of December 31, 2021. During 2022, PP sold merchandise that cost P100,000 to SS for P125,000. 60% of the 2022 inter company sale was resold to the customers of SS. Selected profit or loss items for 2022 are provided below: PP SS Sales P600,000 P300,000 Cost of sales 480,000 250,000 Operating expenses 40,000 20,000 How much is the consolidated cost of sales? A. 607,000 B. 603,000 C. 732,000 D. 853,000 How much is the consolidated net income attributable to the parent for 2022? A 102,000 B. None of the choices C. 108,000 D. 102,400 How much is the consolidated sales for 2022? A. 855,000 B. 800,000 C. 900,000 D. 775.000 How much is the consolidated net income…
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In 2020, parent reports Cost of Goods Sold of $4,000,000. Its 90% owned subsidiary reports Cost of Goods Sold of $1,000,000 in 2020. During 2019 the subsidiary had $60,000 of unrealized gains on intercompany sales to its parent. By the end of 2020, all inventory subject to the intercompany transfer has been sold to third parties. In 2020, the subsidiary had sold $200,000 of goods to its parent and had $30,000 of unrealized gains. How much is consolidated cost of goods sold in 2020.
Question: ClipRite sold ProForm inventory costing $72,000 during the last six months of 2020 for $120,000. At year-end, 30 percent remained ClipRite sold ProForm inventory costing $200,000 during 2021. At yearend, 1 percent is left. What are the consolidated balances? Proform acquired 70 percent of ClipRite on June 30, 2020, for $910,00 in cash. Based on ClipRites acquistion-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $10,000 per year. No goodwill was recognized in the acuisition. The noncontrolling interest fair value was assessed at $390,000 at the acquisition date. The 2021 financial statements are as follows: Proform ClipRite Sales -800,000 -600,000 Costs of goods sold 535,000 400,000 Operating expenses 100,000 100,000 Dividend Income -35,000 Net Income -200,000 -100,000 Retained earning, 1/1/21 -1,300,000 -850,000 Net Income -200,000 -100,000 Dividend declared 100,000…
Question 1 On 1 April 20X4 Triangle sold maturing inventory that had a carrying value of R3 million (at cost) to Factor all, a finance house, for R5 million. Its estimated market value at this date was in excess of R5 million and is expected to be R8.5 million as of 31 March 20X8. The inventory will not be ready for sale until 31 March 20X8 and will remain on Triangle's premises until this date. The sale contract includes a clause allowing Triangle to repurchase the inventory at any time up to 31 March 20X8 at a price of R5 million plus interest at 10% per annum compounded from 1 April 20X4. The proceeds of the sale have been debited to the bank and the sale (and associated profit) have been recognised in Triangle's statement of profit or loss. Required: (a) Discuss how the sale of inventory should be accounted for in accordance with the principles of IAS 18 Revenue and the IASB's Conceptual Framework for Financial Reporting. (b) Prepare any accounting adjustments required to…