Question
In: Accounting
Up and its 80 percent–owned subsidiary (Down) reported the following figures for the year ending December...
Up and its 80 percent–owned subsidiary (Down) reported the following figures for the year ending December 31, 2018. Down paid dividends of $43,000 during this period.
| Up | Down | ||||||
| Sales | $ | (860,000 | ) | $ | (430,000 | ) | |
| Cost of goods sold | 430,000 | 201,100 | |||||
| Operating expenses | 249,400 | 86,000 | |||||
| Dividend income | (34,400 | ) | 0 | ||||
| Net income | $ | (215,000 | ) | $ | (142,900 | ) | |
in 2017, intra-entity gross profits of $43,000 on upstream transfers of $129,000 were deferred into 2018. In 2018, intra-entity gross profits of $56,900 on upstream transfers of $156,800 were deferred into 2019.
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What amounts appear for each line in a consolidated income statement?
-
What income tax expense should appear on the consolidated income statement if each company files a separate return? Assume that the tax rate is 30 percent.
-
What amounts appear for each line in a consolidated income statement?
-
What income tax expense should appear on the consolidated income statement if each company files a separate return? Assume that the tax rate is 30 percent.
-
What amounts appear for each line in a consolidated income statement?
-
What income tax expense should appear on the consolidated income statement if each company files a separate return? Assume that the tax rate is 30 percent.
Solutions
ekkarill92 answered 3 years agoRelated Solutions
Up and its 80 percent–owned subsidiary (Down) reported the following figures for the year ending December...
Up and its 80 percent–owned subsidiary (Down) reported the
following figures for the year ending December 31, 2018. Down paid
dividends of $54,000 during this period.
Up
Down
Sales
$
(1,080,000
)
$
(540,000
)
Cost of goods sold
540,000
252,800
Operating expenses
313,200
108,000
Dividend income
(43,200
)
0
Net income
$
(270,000
)
$
(179,200
)
In 2017, intra-entity gross profits of $54,000 on upstream
transfers of $162,000 were deferred into 2018. In 2018,
intra-entity gross profits of...
The December 31, 20X8, balance sheets for Pint Corporation and its 80 percent-owned subsidiary Saloon Company...
The December 31, 20X8, balance sheets for Pint Corporation and
its 80 percent-owned subsidiary Saloon Company contained the
following summarized amounts:
PINT CORPORATION AND SALOON COMPANY
Balance Sheets
December 31, 20X8
Pint
Corporation
Saloon
Company
Assets
Cash & Receivables
$
99,000
$
42,000
Inventory
156,000
103,000
Buildings & Equipment (net)
313,000
288,000
Investment in Saloon Company
263,200
Total Assets
$
831,200
$
433,000
Liabilities & Equity
Accounts Payable
$
131,200
$
50,000
Common Stock
188,000
137,000
Retained Earnings
512,000
246,000...
Following are separate income statements for Austin, Inc., and its 80 percent owned subsidiary, Rio Grande...
Following are separate income statements for Austin, Inc., and
its 80 percent owned subsidiary, Rio Grande Corporation as well as
a consolidated statement for the business combination as a
whole.
Austin
Rio Grande
Consolidated
Revenues
$
(760,000
)
$
(540,000
)
$
(1,300,000
)
Cost of goods sold
420,000
320,000
740,000
Operating expenses
120,000
66,000
215,000
Equity in earnings of Rio
Grande
(104,000
)
Individual company net
income
$
(324,000
)
$
(154,000
)
Consolidated net income
$
(345,000
)...
Following are separate income statements for Austin, Inc., and its 80 percent owned subsidiary, Rio Grande...
Following are separate income statements for Austin, Inc., and
its 80 percent owned subsidiary, Rio Grande Corporation as well as
a consolidated statement for the business combination as a
whole.
Austin
Rio Grande
Consolidated
Revenues
$
(739,000
)
$
(526,000
)
$
(1,265,000
)
Cost of goods sold
413,000
313,000
726,000
Operating expenses
114,000
83,000
235,000
Equity in earnings of Rio Grande
(70,000
)
Individual company net income
$
(282,000
)
$
(130,000
)
Consolidated net income
$
(304,000
)...
The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company:
The following separate income statements are for Burks Company
and its 80 percent–owned subsidiary, Foreman Company:BurksForemanRevenues$(422,000)$(322,000)Expenses373,000236,000Gain on sale of equipment0(26,000)Equity earnings of
subsidiary(63,000)0Net income$(112,000)$(112,000)Outstanding common shares60,00033,000Additional InformationAmortization expense resulting from Foreman’s excess
acquisition-date fair value is $36,000 per year.Burks has convertible preferred stock outstanding. Each of these
6,000 shares is paid a dividend of $4 per year. Each share can be
converted into four shares of common stock.Stock warrants to buy 14,000 shares of Foreman are also
outstanding. For $10,...
The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company:...
The following separate income statements are for Burks Company
and its 80 percent–owned subsidiary, Foreman Company:
Burks
Foreman
Revenues
$
(420,000
)
$
(320,000
)
Expenses
344,000
235,000
Gain on sale of equipment
0
(25,000
)
Equity earnings of
subsidiary
(62,000
)
0
Net income
$
(138,000
)
$
(110,000
)
Outstanding common shares
60,000
30,000
Additional Information
Amortization expense resulting from Foreman’s excess
acquisition-date fair value is $35,000 per year.
Burks has convertible preferred stock outstanding. Each of these...
The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company:...
The following separate income statements are for Burks Company
and its 80 percent–owned subsidiary, Foreman Company: Burks Foreman
Revenues $ (448,000 ) $ (348,000 ) Expenses 273,000 249,000 Gain on
sale of equipment 0 (39,000 ) Equity earnings of subsidiary (73,000
) 0 Net income $ (248,000 ) $ (138,000 ) Outstanding common shares
60,000 40,000
Additional Information Amortization expense resulting from
Foreman’s excess acquisition-date fair value is $49,000 per year.
Burks has convertible preferred stock outstanding. Each of these...
The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company:...
The following separate income statements are for Burks Company
and its 80 percent–owned subsidiary, Foreman Company:
Burks
Foreman
Revenues
$
(438,000
)
$
(338,000
)
Expenses
270,000
244,000
Gain on sale of equipment
0
(34,000
)
Equity earnings of
subsidiary
(68,000
)
0
Net income
$
(236,000
)
$
(128,000
)
Outstanding common shares
65,000
40,000
Additional Information
Amortization expense resulting from Foreman’s excess
acquisition-date fair value is $41,000 per year.
Burks has convertible preferred stock outstanding. Each of these...
The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company:...
The following separate income statements are for Burks Company
and its 80 percent–owned subsidiary, Foreman Company:
Burks
Foreman
Revenues
$
(400,000
)
$
(328,000
)
Expenses
220,000
239,000
Gain on sale of equipment
0
(29,000
)
Equity earnings of subsidiary
(66,000
)
0
Net income
$
(246,000
)
$
(118,000
)
Outstanding common shares
70,000
36,000
Additional Information
Amortization expense resulting from Foreman’s excess
acquisition-date fair value is $34,000 per year.
Burks has convertible preferred stock outstanding. Each of
these...
Following are separate income statements for Austin, Inc., and its 80 percent–owned subsidiary, Rio Grande Corporation...
Following are separate income statements for Austin, Inc., and
its 80 percent–owned subsidiary, Rio Grande Corporation as well as
a consolidated statement for the business combination as a whole
(credit balances indicated by parentheses).
Austin
Rio Grande
Consolidated
Revenues
$
(738,000
)
$
(538,000
)
$
(1,276,000
)
Cost of goods sold
438,000
262,000
700,000
Operating expenses
138,000
108,000
271,000
Equity in earnings of Rio Grande
(114,400
)
Individual company net income
$
(276,400
)
$
(168,000
)
Consolidated net...
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