Question
In: Accounting
Pie Bakery owns 70 percent of Slice Products Company’s stock. On January 1, 20X9, inventory reported...
Pie Bakery owns 70 percent of Slice Products Company’s stock. On
January 1, 20X9, inventory reported by Pie included 22,000 bags of
flour purchased from Slice at $15 per bag. By December 31, 20X9,
all the beginning inventory purchased from Slice Products had been
baked into products and sold to customers by Pie. There were no
transactions between Pie and Slice during 20X9.
Both Pie Bakery and Slice Products price their sales at cost plus
50 percent markup for profit. Pie reported income from its baking
operations of $314,000, and Slice reported net income of $264,000
for 20X9.
Required:
a. Compute the amount reported as cost of goods sold in the 20X9
consolidated income statement for the flour purchased from Slice in
20X8. (Do not round intermediate
calculations.)
b. Prepare the consolidation entry or entries required to remove
the effects of the unrealized profit in beginning inventory in
preparing the consolidation worksheet as of December 31, 20X9.
(Do not round intermediate
calculations.)
- Record the consolidation entry to remove the effect of unrealized profit in beginning inventory.
c. Compute the amounts reported as consolidated net income and
income assigned to the controlling interest in the 20X9
consolidated income statement. (Do not round intermediate
calculations.)
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Solutions
ekkarill92 answered 1 year agoRelated Solutions
pie bakery owns 60 percent of slice products company's stock. during 20x8 slice produced 100,000 bags...
pie bakery owns 60 percent of slice products company's stock.
during 20x8 slice produced 100,000 bags of flour which it sold to
pie for $900,000. On december 31, 20x8 pie had 20,000 bags of flour
purchased from slice products on hand. slice prices its slaes at
cost plus 50 percent for profit. pie, which purchased all its flour
from slice in 20x8 had no inventory on hand jan 1, 20x8. Pie
reported income from baking operations of $400,000 and slice...
Pie Corporation acquired 75 percent of Slice Company’s ownership on January 1, 20X8, for $96,000. At...
Pie Corporation acquired 75 percent of Slice Company’s ownership
on January 1, 20X8, for $96,000. At that date, the fair value of
the noncontrolling interest was $32,000. The book value of Slice’s
net assets at acquisition was $92,000. The book values and fair
values of Slice’s assets and liabilities were equal, except for
Slice’s buildings and equipment, which were worth $18,400 more than
book value. Accumulated depreciation on the buildings and equipment
was $24,000 on the acquisition date. Buildings and...
Pie Corporation acquired 75 percent of Slice Company’s ownership on January 1, 20X8, for $96,000. At...
Pie Corporation acquired 75 percent of Slice Company’s ownership
on January 1, 20X8, for $96,000. At that date, the fair value of
the noncontrolling interest was $32,000. The book value of Slice’s
net assets at acquisition was $91,000. The book values and fair
values of Slice’s assets and liabilities were equal, except for
Slice’s buildings and equipment, which were worth $18,200 more than
book value. Accumulated depreciation on the buildings and equipment
was $27,000 on the acquisition date. Buildings and...
Paste Corporation acquired 70 percent of Stick Company's stock on January 1, 20X9, for $105,000. At...
Paste Corporation acquired 70 percent of Stick Company's stock
on January 1, 20X9, for $105,000. At that date, the fair value of
the noncontrolling interest was equal to 30 percent of the book
value of Stick Company. The companies reported the following
stockholders’ equity balances immediately after the
acquisition:
Paste
Corporation
Stick
Company
Common Stock
$
120,000
$
30,000
Additional Paid-in Capital
230,000
80,000
Retained Earnings
290,000
40,000
Total
$
640,000
$
150,000
Paste and Stick reported 20X9 operating incomes...
Klon Corporation owns 70 percent of Brant Company’s stock and 60 percent of Torkel Company’s stock....
Klon Corporation owns 70 percent of Brant Company’s stock and 60
percent of Torkel Company’s stock. During 20X8, Klon sold inventory
purchased in 20X7 for $66,000 to Brant for $110,000. Brant then
sold the inventory at its cost of $110,000 to Torkel. Prior to
December 31, 20X8, Torkel sold $50,000 of inventory to a
nonaffiliate for $80,000 and held $60,000 in inventory at December
31, 20X8.
a. Prepare the journal entries recorded by Klon, Brant, and Torkel
during 20X8 relating...
Wood Corporation owns 70 percent of Carter Company’s voting shares. On January 1, 20X3, Carter sold...
Wood Corporation owns 70 percent of Carter Company’s voting
shares. On January 1, 20X3, Carter sold bonds with a par value of
$645,000 at 98. Wood purchased $430,000 par value of the bonds; the
remainder was sold to nonaffiliates. The bonds mature in five years
and pay an annual interest rate of 8 percent. Interest is paid
semiannually on January 1 and July 1.
a. What amount of interest expense should be reported in the
20X4 consolidated income statement? (Do...
Wood Corporation owns 70 percent of Carter Company’s voting shares. On January 1, 20X3, Carter sold...
Wood Corporation owns 70 percent of Carter Company’s voting
shares. On January 1, 20X3, Carter sold bonds with a par value of
$645,000 at 98. Wood purchased $430,000 par value of the bonds; the
remainder was sold to nonaffiliates. The bonds mature in five years
and pay an annual interest rate of 8 percent. Interest is paid
semiannually on January 1 and July 1.
Required:
a.
What amount of interest expense should be reported in the 20X4
consolidated income statement?...
Wood Corporation owns 70 percent of Carter Company’s voting shares. On January 1, 20X3, Carter sold...
Wood Corporation owns 70 percent of Carter Company’s voting
shares. On January 1, 20X3, Carter sold bonds with a par value of
$615,000 at 98. Wood purchased $410,000 par value of the bonds; the
remainder was sold to nonaffiliates. The bonds mature in five years
and pay an annual interest rate of 8 percent. Interest is paid
semiannually on January 1 and July 1.
Required:
a. What amount of interest expense should be reported in the
20X4 consolidated income statement?...
Wood Corporation owns 70 percent of Carter Company’s voting shares. On January 1, 20X3, Carter sold...
Wood Corporation owns 70 percent of Carter Company’s voting
shares. On January 1, 20X3, Carter sold bonds with a par value of
$652,500 at 98. Wood purchased $435,000 par value of the bonds; the
remainder was sold to nonaffiliates. The bonds mature in five years
and pay an annual interest rate of 8 percent. Interest is paid
semiannually on January 1 and July 1.
a. What amount of interest expense should be reported in the
20X4 consolidated income statement? (Do...
Wood Corporation owns 70 percent of Carter Company’s voting shares. On January 1, 20X3, Carter sold...
Wood Corporation owns 70 percent of Carter Company’s voting
shares. On January 1, 20X3, Carter sold bonds with a par value of
$645,000 at 98. Wood purchased $430,000 par value of the bonds; the
remainder was sold to nonaffiliates. The bonds mature in five years
and pay an annual interest rate of 8 percent. Interest is paid
semiannually on January 1 and July 1.
a.
What amount of interest expense should be reported in the 20X4
consolidated income statement?
b....
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