Question

In: Accounting

PART D: Several years ago Polar Inc. acquired an 80% interest in Icecap Co. The book...

PART D:

Several years ago Polar Inc. acquired an 80% interest in Icecap Co. The book values of Icecap's asset and liability accounts at that time were considered to be equal to their fair values. Polar’s acquisition value corresponded to the underlying book value of Icecap so that no allocations or goodwill resulted from the transfer.

The following selected account balances were from the individual financial records of these two companies as of December 31, 2018:

Assume that Icecap sold inventory to Polar at a markup equal to 25% of cost. Intra-entity transfers were $70,000 in 2017 and $112,000 in 2018. Of this inventory, $29,000 of the 2017 transfers were retained and then sold by Polar in 2018, whereas $49,000 of the 2018 transfers was held until 2019.

Required:

For the consolidated financial statements for 2018, determine the balances that would appear for the following accounts: (i) Cost of Goods Sold; (ii) Inventory; and (iii) Net income attributable to the noncontrolling interest.                                                                                     

Solutions

Expert Solution

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Several years ago Polar Inc. acquired an 80% interest in Icecap Co. The book values of...
Several years ago Polar Inc. acquired an 80% interest in Icecap Co. The book values of Icecap's asset and liability accounts at that time were considered to be equal to their fair values. Polar’s acquisition value corresponded to the underlying book value of Icecap so that no allocations or goodwill resulted from the transfer. The following selected account balances were from the individual financial records of these two companies as of December 31, 2018: Assume that Icecap sold inventory to...
1Several years ago Polar Inc. acquired an 80% interest in Icecap Co. The book values of...
1Several years ago Polar Inc. acquired an 80% interest in Icecap Co. The book values of Icecap's asset and liability accounts at that time were considered to be equal to their fair values. Polar’s acquisition value corresponded to the underlying book value of Icecap so that no allocations or goodwill resulted from the transfer. The following selected account balances were from the individual financial records of these two companies as of December 31, 2018: Polar Icecap Inc. Co. Sales $896,000...
Parkette, Inc., acquired a 60 percent interest in Skybox Company several years ago. During 2017, Skybox...
Parkette, Inc., acquired a 60 percent interest in Skybox Company several years ago. During 2017, Skybox sold inventory costing $188,000 to Parkette for $235,000. A total of 13 percent of this inventory was not sold to outsiders until 2018. During 2018, Skybox sold inventory costing $225,320 to Parkette for $262,000. A total of 30 percent of this inventory was not sold to outsiders until 2019. In 2018, Parkette reported cost of goods sold of $577,500 while Skybox reported $365,000. What...
In 2005, North Inc. acquired an 80% interest in South Co. On the date of acquisition,...
In 2005, North Inc. acquired an 80% interest in South Co. On the date of acquisition, the book values of South’s asset and liability accounts at that time were considered to be equal to their fair values. No allocations or goodwill resulted from the combination because North’s acquisition value corresponded to the underlying book value of South The following selected account balances were from the individual financial records of these two companies as of December 31, 2019: . North South...
Lake acquired a controlling interest in Boxwood several years ago. During the current fiscal period, the...
Lake acquired a controlling interest in Boxwood several years ago. During the current fiscal period, the two companies individually reported the following income (exclusive of any investment income): Lake $ 360,000 Boxwood 110,000 Lake paid a $60,000 cash dividend during the current year and Boxwood distributed $14,000. Boxwood sells inventory to Lake each period. Intra-entity gross profits of $22,400 were present in Lake's beginning inventory for the current year, and its ending inventory carried $32,900 in intra-entity gross profits. View...
Albuquerque, Inc., acquired 24,000 shares of Marmon Company several years ago for $810,000. At the acquisition...
Albuquerque, Inc., acquired 24,000 shares of Marmon Company several years ago for $810,000. At the acquisition date, Marmon reported a book value of $880,000, and Albuquerque assessed the fair value of the noncontrolling interest at $270,000. Any excess of acquisition-date fair value over book value was assigned to broadcast licenses with indefinite lives. Since the acquisition date and until this point, Marmon has issued no additional shares. No impairment has been recognized for the broadcast licenses. At the present time,...
Albuquerque, Inc., acquired 24,000 shares of Marmon Company several years ago for $780,000. At the acquisition...
Albuquerque, Inc., acquired 24,000 shares of Marmon Company several years ago for $780,000. At the acquisition date, Marmon reported a book value of $800,000, and Albuquerque assessed the fair value of the noncontrolling interest at $32,500. Any excess of acquisition-date fair value over book value was assigned to broadcast licenses with indefinite lives. Since the acquisition date and until this point, Marmon has issued no additional shares. No impairment has been recognized for the broadcast licenses. At the present time,...
Albuquerque, Inc., acquired 18,000 shares of Marmon Company several years ago for $750,000. At the acquisition...
Albuquerque, Inc., acquired 18,000 shares of Marmon Company several years ago for $750,000. At the acquisition date, Marmon reported a book value of $820,000, and Albuquerque assessed the fair value of the noncontrolling interest at $250,000. Any excess of acquisition-date fair value over book value was assigned to broadcast licenses with indefinite lives. Since the acquisition date and until this point, Marmon has issued no additional shares. No impairment has been recognized for the broadcast licenses. At the present time,...
Albuquerque, Inc., acquired 24,000 shares of Marmon Company several years ago for $720,000. At the acquisition...
Albuquerque, Inc., acquired 24,000 shares of Marmon Company several years ago for $720,000. At the acquisition date, Marmon reported a book value of $870,000, and Albuquerque assessed the fair value of the noncontrolling interest at $180,000. Any excess of acquisition-date fair value over book value was assigned to broadcast licenses with indefinite lives. Since the acquisition date and until this point, Marmon has issued no additional shares. No impairment has been recognized for the broadcast licenses. At the present time,...
Albuquerque, Inc., acquired 24,000 shares of Marmon Company several years ago for $720,000. At the acquisition...
Albuquerque, Inc., acquired 24,000 shares of Marmon Company several years ago for $720,000. At the acquisition date, Marmon reported a book value of $500,000, and Albuquerque assessed the fair value of the noncontrolling interest at $30,000. Any excess of acquisition-date fair value over book value was assigned to broadcast licenses with indefinite lives. Since the acquisition date and until this point, Marmon has issued no additional shares. No impairment has been recognized for the broadcast licenses. At the present time,...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT