Master Products acquired 100 percent ownership of LoCal Bakeries on January 1, 20X3, when the fair value

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Master Products acquired 100 percent ownership of LoCal Bakeries on January 1, 20X3, when the fair value of LoCal's depreciable assets was $50,000 greater than book value. The depreciable assets had an eight-year economic life at the date of the acquisition. 

Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in

During 20X3, Master Products purchased a special imported yeast for $35,000 and resold it to LoCal for $50,000. LoCal did not resell any of the yeast before year-end. 


Required 

Determine the amounts to be reported for each of the following items in the consolidated income statement for 20X3:

a. Sales. 

b. Investment income from LoCal Bakeries. 

c. Cost of goods sold. 

d. Depreciation expense.

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Advanced Financial Accounting

ISBN: 978-0073526911

8th Edition

Authors: Richard Baker, Valdean Lembke, Thomas King, Cynthia Jeffrey

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