ADVANCED ACCOUNTING W/ACCESS >CUSTOM<
14th Edition
ISBN: 9781307594683
Author: Hoyle
Publisher: MCG/CREATE
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 5, Problem 8P
To determine
Introduction: To account for related companies as a single entity all the effects of intercompany sales and purchases are eliminated. Total recorded inter-entity sales are deleted regardless of whether it is from parent to subsidiary or from subsidiary to parent.
The non-controlling interest in 2021 income of the subsidiary.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Angela, Incorporated, holds a 90 percent interest in Corby Company. During 2023, Corby sold inventory
costing $105,750 to Angela for $141,000. Of this inventory, $48,600 worth was not sold to outsiders until
2024. During 2024, Corby sold inventory costing $96,850 to Angela for $149,000. A total of $51,400 of this
inventory was not sold to outsiders until 2025. In 2024, Angela reported separate net income of $228,000
while Corby's net income was $100,500 after excess amortizations. What is the noncontrolling interest in
the 2024 income of the subsidiary? Multiple Choice $10,050 $9,466 $10,330 $9,980
Boboy, Inc. acquired 60 percent interest in Homer Co. several years ago. During 2020, Homer sold
inventory costing P75,000 to Boboy for P100.000. A total of 16 percent of this inventory was not sold to
outsider until 2021. During 2021, Homer sold inventory costing P96,000 to Boboy for P120,000. A total
of 35 percent of this inventory was not sold to outsiders until 2022. In 2021, Boboy reported cost of
sales of P380,000 while Homer reported P210,000. What is consolidated cost of sales?
Parkette, Inc., acquired a 60 percent interest in Skybox Company several years ago. During 2020, Skybox sold inventory costing $90,200 to Parkette for $110,000. A total of 12 percent of this inventory was not sold to outsiders until 2021. During 2021, Skybox sold inventory costing $294,800 to Parkette for $335,000. A total of 29 percent of this inventory was not sold to outsiders until 2022. In 2021, Parkette reported cost of goods sold of $527,500 while Skybox reported $422,500. What is the consolidated cost of goods sold in 2021?
Multiple Choice
a
$605,718.
b
$959,282.
c
$635,400.
d
$624,282.
Chapter 5 Solutions
ADVANCED ACCOUNTING W/ACCESS >CUSTOM<
Ch. 5 - Prob. 1QCh. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - James, Inc., sells inventory to Matthews Company,...Ch. 5 - Prob. 6QCh. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - Prob. 10Q
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - Prob. 6PCh. 5 - Prob. 8PCh. 5 - Prob. 11PCh. 5 - What is the total of consolidated cost of goods...Ch. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - Prob. 15PCh. 5 - What is the consolidated total for inventory at...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Parkette, Inc., acquired a 60 percent interest in Skybox Company several years ago. During 2017, Skybox sold inventory costing $160,000 to Parkette for $200,000. A total of 18 percent of this inventory was not sold to outsiders until 2018. During 2018, Skybox sold inventory costing $297,500 to Parkette for $350,000. A total of 30 percent of this inventory was not sold to outsiders until 2019. In 2018, Parkette reported cost of goods sold of $607,500 while Skybox reported $450,000. What is the consolidated cost of goods sold in 2018? $698,950 $720,000 $1,066,050 $716,050arrow_forwardRommel, Inc. acquired a 60% interest in Mikee Company several years ago. During 2020, Mikee sold inventory costing P75,000 to Rommel for P100,000. A total of 16% of this inventory was not sold to outsider until 2021. During 2021, Mikee sold inventory costing P96,000 to Rommel for P120,000. A total of 35% of this inventory was not sold to outsiders until 2022. In 2021, Rommel reported cost of sales of P380,000 while Mikee reported P210,000. What is the consolidated cost of sales?a. 522,400b. 474,400c. 473,400d. 594,400arrow_forwardRAM, Inc., acquired a 60 percent interest in LMU Company several years ago. During 2017, LMU sold inventory costing $160,000 to RAM for $200,000. A total of 18 percent of this inventory was not sold to outsiders until 2018. During 2018, LMU sold inventory costing $297,500 to RAM for $350,000. A total of 30 percent of this inventory was not sold to outsiders until 2019. In 2018, RAM reported cost of goods sold of $607,500 while LMU reported $450,000. What consolidation entries will be made for these transactions in 2018 consolidation?arrow_forward
- Camille, Inc., sold $147,000 in inventory to Eckerle Company during 2020 for $245,000. Eckerle resold $109,000 of this merchandise in 2020 with the remainder to be disposed of during 2021. Assuming that Camille owns 34 percent of Eckerle and applies the equity method, what journal entry is recorded at the end of 2020 to defer the intra-entity gross profit?arrow_forwardP Inc. owns a 60% interest in S Corp. During 2020 S sold inventory costing $160,000 to P for $200,000. A total of 18 percent of this inventory was not sold to outsiders until 2021. During 2021 S sold inventory costing $297,500 to P for $350,000. A total of 30 percent of this inventory was not sold to outsiders until 2022. In 2021 P reported the cost of goods sold of $607,500 while S reported $450,000. What is the consolidated cost of goods sold in 2021?arrow_forwardChoose the correct. Parkette, Inc., acquired a 60 percent interest in Skybox Company several years ago. During 2017, Skybox sold inventory costing $160,000 to Parkette for $200,000. A total of 18 percent of this inventory was not sold to outsiders until 2018. During 2018, Skybox sold inventory costing $297,500 to Parkette for $350,000. A total of 30 percent of this inventory was not sold to outsiders until 2019. In 2018, Parkette reported cost of goods sold of $607,500 while Skybox reported $450,000. What is the consolidated cost of goods sold in 2018?a. $698,950b. $720,000c. $1,066,050d. $716,050arrow_forward
- Huge owns 25% of Small and at January 1, 2020 has a balance in its Investment in Small of $400,000. Huge has significant influence. In 2020 Huge sells inventory (cost $60,000) to Small for $80,000. At the end of 2020, 30% of the inventory remains unsold. Small sells all the remaining inventory to third parties in 2021. During 2021, Huge sells inventory (cost $80,000) to Small for $100,000, with 60% of this inventory being sold by Small to third parties in 2021. Small sells all the remaining inventory to third parties in 2022. In 2021 Small reported $90,000 of net income and paid dividends of $20,000. What is the amount of Equity Income recognized in 2021 ?arrow_forwardCamille, Inc., sold $130,000 in inventory to Eckerle Company during 2020 for $250,000. Eckerle resold $89,000 of this merchandise in 2020 with the remainder to be disposed of during 2021. Assuming that Camille owns 20 percent of Eckerle and applies the equity method, what journal entry is recorded at the end of 2020 to defer the intra-entity gross profit? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)arrow_forwardX Inc. owns 70% of Y Inc. During 2020, X Inc. sold inventory to Y for $10,000. Half of this inventory remained in Y's warehouse at year end. Y Inc. sold inventory to X Inc. for $5,000. 40% of this intentory remained in X's warehouse at year end. The gross profit percentage on sales is 20% for both companies. Unless otherwise stated, assume X Inc. uses the cost method to account for its investment in Y Inc. What effect (if any) would the unrealized profits on the above intercompany sales have on the non-controlling interest account on the consolidated balance sheet? There would be a decrease to the non-controlling interest account for the amount of $120 There would be a decrease to the non-controlling interest account for the amount of $80 There would be a decrease to the non-controlling interest account for the amount of $400 There would be no impact on the non-controlling interest account.arrow_forward
- Dysabel Corp. owns 80% of Marina, Inc.'s common stock. During 2020, Dysabel sold Marina P337,500 of inventory on the same terms as sales made to third parties. Marina sold all of the inventory purchased from Dysabel in 2020. The following information pertains to Marina and Dysabel's sales for 2020: Dysabel P1,350,000 540,000 P 810,000 Marina P945,000 472,500 P474,500 Sales Cost of sales . What amount should Dysabel report as Cost of sales in its 2020 consolidated income statement? O 580,500 1,012,500 918,000 675,000arrow_forwardParker Inc. (Parker) owns 70% of Queen Ltd. (Queen). Parker and Queen both have December 31st year ends. On January 1, 2022, Queen had inventory in its warehouse which was purchased from Parker for $12,000 in 2021. This inventory was sold to an outside party during 2022. During 2022, Parker sold inventory to Queen for $50,000. 40% remained in Queen's warehouse at year end. Also, during 2022, Queen sold inventory to Parker for $25,000. 70% of this inventory remained in Parker's warehouse at year end. Both companies are subject to a tax rate of 40%. The gross profit percentage on sales is 30% for both companies. Parker uses the cost method to account for its Investment in Queen. The inventories of both companies as at December 31, 2022 were all sold to outsiders during 2023. There were no intercompany transactions during 2023. Prepare a schedule showing the realized and unrealized profits resulting from upstream transactions (i.e., Queen selling to Parker) for 2022 and 2023. Your…arrow_forwardAlex, Inc., buys 30 percent of Steinbart Company on January 1, 2020, for $762,000. The equity method of accounting is to be used. Steinbart’s net assets on that date were $2.30 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Steinbart immediately begins supplying inventory to Alex as follows: Year Cost to Steinbart Transfer Price Amount Held by Alexat Year-End(at transfer price) 2020 $202,160 $266,000 $66,500 2021 117,990 171,000 52,000 Inventory held at the end of one year by Alex is sold at the beginning of the next. Steinbart reports net income of $95,500 in 2020 and $130,300 in 2021 and declares $30,000 in dividends each year. What is the equity income in Steinbart to be reported by Alex in 2021?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Operating Loss Carryback and Carryforward; Author: SuperfastCPA;https://www.youtube.com/watch?v=XiYhgzSGDAk;License: Standard Youtube License