Question
In: Accounting
Player Company acquired 70 percent ownership of Scout Company’s voting shares on January 1, 20X2. During...
Player Company acquired 70 percent ownership of Scout Company’s voting shares on January 1, 20X2. During 20X5, Player purchased inventory for $29,000 and sold the full amount to Scout Company for $39,000. On December 31, 20X5, Scout’s ending inventory included $7,800 of items purchased from Player. Also in 20X5, Scout purchased inventory for $52,000 and sold the units to Player for $82,000. Player included $20,500 of its purchase from Scout in ending inventory on December 31, 20X5. Summary income statement data for the two companies revealed the following: Player Company Scout Company Sales $ 360,750 $ 210,000 Income from Scout 48,750 $ 409,500 $ 210,000 Cost of Goods Sold $ 233,000 $ 105,000 Other Expenses 65,000 25,000 Total Expenses $ (298,000 ) $ (130,000 ) Net Income $ 111,500 $ 80,000
Required:
a. Compute the amount to be reported as sales in the 20X5 consolidated income statement.
b. Compute the amount to be reported as cost of goods sold in the
20X5 consolidated income statement.
c. What amount of income will be assigned to the noncontrolling
shareholders in the 20X5 consolidated income statement?
d. What amount of income will be assigned to the controlling
interest in the 20X5 consolidated income statement?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Prem Company acquired 60 percent ownership of Cooper Company's voting shares on January 1, 20X2. During...
Prem Company acquired 60 percent ownership of Cooper Company's
voting shares on January 1, 20X2. During 20X5, Prem purchased
inventory for $20,000 and sold the full amount to Cooper Company
for $30,000. On December 31, 20X5, Cooper's ending inventory
included $6,000 of items purchased from Prem. Also in 20X5, Cooper
purchased inventory for $50,000 and sold the units to Prem for
$80,000. Prem included $20,000 of its purchase from Cooper in
ending inventory on December 31, 20X5.
Summary income statement...
Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for...
Pop Corporation acquired 70 percent of Soda Company's voting
common shares on January 1, 20X2, for $118,300. At that date, the
noncontrolling interest had a fair value of $50,700 and Soda
reported $70,000 of common stock outstanding and retained earnings
of $31,000. The differential is assigned to buildings and
equipment, which had a fair value $24,000 higher than book value
and a remaining 10-year life, and to patents, which had a fair
value $44,000 higher than book value and a...
Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for...
Pop Corporation acquired 70 percent of Soda Company's voting
common shares on January 1, 20X2, for $119,000. At that date, the
noncontrolling interest had a fair value of $51,000 and Soda
reported $70,000 of common stock outstanding and retained earnings
of $33,000. The differential is assigned to buildings and
equipment, which had a fair value $29,000 higher than book value
and a remaining 10-year life, and to patents, which had a fair
value $38,000 higher than book value and a...
Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for...
Pop Corporation acquired 70 percent of Soda Company's voting
common shares on January 1, 20X2, for $118,300. At that date, the
noncontrolling interest had a fair value of $50,700 and Soda
reported $70,000 of common stock outstanding and retained earnings
of $31,000. The differential is assigned to buildings and
equipment, which had a fair value $24,000 higher than book value
and a remaining 10-year life, and to patents, which had a fair
value $44,000 higher than book value and a...
Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $118,300.
Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $118,300. At that date, the noncontrolling interest had a fair value of $50,700 and Soda reported $70,000 of common stock outstanding and retained earnings of $31,000. The differential is assigned to buildings and equipment, which had a fair value $24,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $44,000 higher than book value and a...
Brown Corporation holds 70 percent of Transom Company’s voting common stock. On January 1, 20X2, Transom...
Brown Corporation holds 70 percent of Transom Company’s voting
common stock. On January 1, 20X2, Transom paid $360,000 to acquire
a building with a 15-year expected economic life. Transom uses
straight-line depreciation for all depreciable assets. On December
31, 20X7, Brown purchased the building from Transom for $180,000.
Brown reported income, excluding investment income from Transom, of
$135,000 and $150,000 for 20X7 and 20X8, respectively. Transom
reported net income of $12,000 and $48,000 for 20X7 and 20X8,
respectively.
Required:
a....
On January 1, 2017, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing,...
On January 1, 2017, Corgan Company acquired 70 percent of the
outstanding voting stock of Smashing, Inc., for a total of
$1,155,000 in cash and other consideration. At the acquisition
date, Smashing had common stock of $840,000, retained earnings of
$390,000, and a noncontrolling interest fair value of $495,000.
Corgan attributed the excess of fair value over Smashing's book
value to various covenants with a 20-year remaining life. Corgan
uses the equity method to account for its investment in
Smashing.Net...
On January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing,...
On January 1, 2020, Corgan Company acquired 70 percent of the
outstanding voting stock of Smashing, Inc., for a total of
$1,435,000 in cash and other consideration. At the acquisition
date, Smashing had common stock of $920,000, retained earnings of
$470,000, and a noncontrolling interest fair value of $615,000.
Corgan attributed the excess of fair value over Smashing's book
value to various covenants with a 20-year remaining life. Corgan
uses the equity method to account for its investment in
Smashing....
On January 1, 2017, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing,...
On January 1, 2017, Corgan Company acquired 70 percent of the
outstanding voting stock of Smashing, Inc., for a total of
$1,015,000 in cash and other consideration. At the acquisition
date, Smashing had common stock of $800,000, retained earnings of
$350,000, and a noncontrolling interest fair value of $435,000.
Corgan attributed the excess of fair value over Smashing's book
value to various covenants with a 20-year remaining life. Corgan
uses the equity method to account for its investment in
Smashing....
On January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing,...
On January 1, 2020, Corgan Company acquired 70 percent of the
outstanding voting stock of Smashing, Inc., for a total of $910,000
in cash and other consideration. At the acquisition date, Smashing
had common stock of $770,000, retained earnings of $320,000, and a
noncontrolling interest fair value of $390,000. Corgan attributed
the excess of fair value over Smashing's book value to various
covenants with a 20-year remaining life. Corgan uses the equity
method to account for its investment in Smashing....
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