Pace Company owns 85% of the outstanding common stock of Sand Company and all the outstanding common

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Pace Company owns 85% of the outstanding common stock of Sand Company and all the outstanding common stock of Star Company. During 2020, the affiliates engaged in intercompany sales as follows:

Sales of MerchandisePace to Sand......................$ 40,000Sand to Pace.........................60,000Sand to Star..........................75,000Star to Pace..........................50,000...........................................$225,000

The following amounts of intercompany profits were included in the December 31, 2019, and December 31, 2020, inventories of the individual companies:

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Income from each company?s independent operations (including sales to affiliates) for the year ended December 31, 2020, is presented here:

Pace Company......................$200,000Sand Company.......................150,000Star Company.........................125,000

Required:

A. Prepare in general journal form the workpaper entries necessary to eliminate intercompany sales and intercompany profit in the December 31, 2020, consolidated financial statements workpaper.

B. Calculate the balance to be reported in the consolidated income statement for the following line items:Consolidated incomeNoncontrolling interest in consolidated incomeControlling interest in consolidated income

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Consolidated Income Statement
When talking about the group financial statements the consolidated financial statements include Consolidated Income Statement that a parent must prepare among other sets of consolidated financial statements. Consolidated Income statement that is...
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Advanced Accounting

ISBN: 978-1119373209

7th edition

Authors: Debra C. Jeter, Paul K. Chaney

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