Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017,
Question:
The following selected account balances are from the individual financial records of these two companies as of December 31, 2018:
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Each of the following problems is an independent situation:
a. Assume that Protrade sells Seacraft inventory at a markup equal to 60 percent of cost. Intra-entity transfers were $114,000 in 2017 and $134,000 in 2018. Of this inventory, Seacraft retained and then sold $52,000 of the 2017 transfers in 2018 and held $66,000 of the 2018 transfers until 2019.
Determine balances for the following items that would appear on consolidated financial statements for 2018:
Cost of Goods Sold
Inventory
Net Income Attributable to Non-controlling Interest
b. Assume that Seacraft sells inventory to Protrade at a markup equal to 60 percent of cost. Intraentity transfers were $74,000 in 2017 and $104,000 in 2018. Of this inventory, $45,000 of the 2017 transfers were retained and then sold by Protrade in 2018, whereas $59,000 of the 2018 transfers were held until 2019.
Determine balances for the following items that would appear on consolidated financial statements for 2018:
Cost of Goods Sold
Inventory
Net Income Attributable to Non-controlling Interest
c. Protrade sells Seacraft a building on January 1, 2017, for $128,000, although its book value was only $74,000 on this date. The building had a five-year remaining life and was to be depreciated using the straight-line method with no salvage value.
Determine balances for the following items that would appear on consolidated financial statements for 2018:
Buildings (net)
Operating Expenses
Net Income Attributable to Non-controlling Interest
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Step by Step Answer:
a Consolidated Cost of Goods Sold Protradescost of goods sold 410000 Seacrafts cost of goods sold 317000 Elimination of 2018intraentity transfers 1340...View the full answer
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
