ADVANCED ACCOUNTING-EBOOK ACCESS
14th Edition
ISBN: 9781264157068
Author: Hoyle
Publisher: MCG
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Chapter 5, Problem 8Q
To determine
Find the non-controlling interest’s share of consolidated net income.
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On January 1, Year 2, PAT Ltd. acquired 90% of SAT Inc. when SAT's retained earnings were
$1,000,000. There was no acquisition differential. PAT accounts for its investment under the cost
method. SAT sells inventory to PAT on a regular basis at a markup of 30% of selling price. The
intercompany sales were $160,000 in Year 2 and $190,000 in Year 3. The total amount owing by PAT
related to these intercompany sales was $60,000 at the end of Year 2 and $50,000 at the end of Year
3. On January 1, Year 3, the inventory of PAT contained goods purchased from SAT amounting to
$70,000, while the December 31, Year 3, inventory contained goods purchased from SAT amounting to
$80,000. Both companies pay income tax at the rate of 40%.
Selected account balances from the records of PAT and SAT for the year ended December 31, Year 3,
were as follows:
Inventory
Accounts Payable
Retained Earnings, Beg. of Year
Sales
Cost of Sales
Income Tax Expense
PAT
$510,000
700,000
2,500,000
4,100,000
3,200,000…
King Company owns a 90 percent interest in the outstanding voting shares of Pawn Company. No excess fair-value amortization resulted from the acquisition. Pawn reports a net income of $110,000 for the current year. Intra-entity sales occur at regular intervals between the two companies. Intra-entity gross profits of $30,000 were present in the beginning inventory balances, whereas $60,000 in similar gross profits were recorded at year-end. What is the noncontrolling interest’s share of consolidated net income?
P acquired 70% of S in 20X8. The statements of profit or loss of the two companies for the year ended 31 December 20X9 showed revenues:
P $100000
S $70000
During November 20X9, S sold goods to P for $8000. None of these items remained in inventory at the end of year.
What is the consolidated revenue for P for the year ended 31 December 20X9?
Chapter 5 Solutions
ADVANCED ACCOUNTING-EBOOK ACCESS
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...
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