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Angela, Inc., holds a 90 percent interest in Corby Company. During 2020, Corby sold inventory costing...
Angela, Inc., holds a 90 percent interest in Corby Company. During 2020, Corby sold inventory costing $99,900 to Angela for $111,000. Of this inventory, $56,600 worth was not sold to outsiders until 2021. During 2021, Corby sold inventory costing $96,800 to Angela for $121,000. A total of $51,500 of this inventory was not sold to outsiders until 2022. In 2021, Angela reported separate net income of $219,000 while Corby's net income was $114,500 after excess amortizations. What is the noncontrolling interest in the 2021 income of the subsidiary?
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Expert Solution
| Amount in $ | |||
| Corbey Net Income | 114,500 | ||
| Add: Deferreal of unrealized gross profit | 5,150 | Working (i) | |
| Less: Unrealized gross profit for the current year | 10,300 | Working (ii) | |
| Adjusted Income of Corbey | 109,350 | ||
| Noncontrolling interest in the 2021 income of the subsidiary | $10,935 | ( 109,350 x 10% ) | |
| Working: | |||
| (i) | Gross Profit % on sale by Corby to Angela | 10% | ( 111,000 - 99,900 ) / 111,000 |
| Unrealized gross profit on unsold inventory | 5,150 | (51,500 x 10% ) | |
| (ii) | Gross profit % on sold inventory | 20% | (121,000 - 96,800 ) / 121,000 |
| Unrealized gross profit for the current year | 10,300 | (51,500 x 20% ) | |
ekkarill92 answered 2 years agoRelated Solutions
Angela, Inc., holds a 90 percent interest in Corby Company. During 2017, Corby sold inventory costing...
Angela, Inc., holds a 90 percent interest in Corby Company.
During 2017, Corby sold inventory costing $111,200 to Angela for
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Angela, Inc., holds a 90 percent interest in Corby Company. During 2017, Corby sold inventory costing...
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(excluding $900,000
earnings from
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$500,000
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$
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Cost of goods sold
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663,000
Depreciation and amortization
113,000
146,000
Gain on sale of building
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Interest expense
53,000
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(276,000
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34,000
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$
(144,000
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Bolero Company holds 75 percent of the common stock of Rivera, Inc., and 40 percent of...
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Inc., and 40 percent of this subsidiary’s convertible bonds. The
following consolidated financial statements are for 2017 and
2018:
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2018
Revenues
$
(945,000
)
$
(1,075,000
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Cost of goods sold
619,000
659,000
Depreciation and
amortization
109,000
138,000
Gain on sale of building
0
(39,000
)
Interest expense
49,000
49,000
Consolidated net income
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$
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Cost of goods sold
605,000
645,000
Depreciation and
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110,000
Gain on sale of building
0
(25,000
)
Interest expense
35,000
35,000
Consolidated net income
(140,000
)
(240,000
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to noncontrolling interest
14,000
16,000
to parent company
$
(126,000
)...
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$
(945,000
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$
(1,075,000
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Cost of goods
sold
619,000
659,000
Depreciation and
amortization
109,000
138,000
Gain on sale of
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0
(39,000
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Interest
expense
49,000
49,000
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(168,000
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following consolidated financial statements are for 2017 and
2018:
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Revenues
$
(965,000
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$
(1,095,000
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Cost of goods sold
623,000
663,000
Depreciation and amortization
113,000
146,000
Gain on sale of building
0
(43,000
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Interest expense
53,000
53,000
Consolidated net income
(176,000
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(276,000
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to noncontrolling interest
32,000
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(144,000
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2018
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(960,000
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$
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Cost of goods sold
622,000
662,000
Depreciation and amortization
112,000
144,000
Gain on sale of building
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(42,000
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Interest expense
52,000
52,000
Consolidated net income
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(274,000
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to noncontrolling interest
31,000
33,000
to parent company
$
(143,000
)...
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