Penguin Corporation acquired 80 percent of the outstanding voting stock of Snow Company on January 1, 2009, for $420,000 in cash and other consideration. At the acquisition date, Penguin assessed Snow’s identifiable assets and liabilities at a collective net fair value of $525,000 and the fair value of the 20 percent noncontrolling interest was $105,000. No excess fair value over book value amortization accompanied the acquisition.

The following selected account balances are from the individual financial records of these two companies as of December 31,2010: LO8 Sales.
Cost of goods sold.
Operating expenses .
Retained earnings, 1/1/10 .
Inventory.
Buildings (net).
Investment income.
Penguin Snow $640,000 $360,000 290,000 197,000 150,000 105,000 740,000 180,000 346,000 110,000 358,000 157,000 Not given -0-
Each ofthefollowing problems is an independent situation:

a. Assume that Penguin sells Snow inventory at a markup equal to 40 percent of cost. Intercom¬ pany transfers were $90,000 in 2009 and $110,000 in 2010. Of this inventory, Snow retained and then sold $28,000 of the 2009 transfers in 2010 and held $42,000 of the 2010 transfers until 2011.
On consolidated financial statements for 2010, determine the balances that would appear for the following accounts:
Cost of Goods Sold Inventory Noncontrolling Interest in Subsidiary’s Net Income

b. Assume that Snow sells inventory to Penguin at a markup equal to 40 percent of cost. Intercom¬ pany transfers were $50,000 in 2009 and $80,000 in 2010. Ofthis inventory, $21,000 ofthe 2009 transfers were retained and then sold by Penguin in 2010, whereas $35,000 ofthe 2010 transfers were held until 2011.
On consolidated financial statements for 2010, determine the balances that would appear for the following accounts:
Cost of Goods Sold Inventory Noncontrolling Interest in Subsidiary’s Net Income

c. Penguin sells Snow a building on January 1, 2009, for $80,000, although its book value was only $50,000 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 the balances that would appear on consolidated financial statements for 2010 for Buildings (net)
Operating Expenses Noncontrolling Interest in Subsidiary’s Net Income