Peel Company owns 90% of the common stock of Seacore Company. Seacore Company sells merchandise to Peel

Question:

Peel Company owns 90% of the common stock of Seacore Company. Seacore Company sells merchandise to Peel Company at 20% above cost. During 2019 and 2020, such sales amounted to $436,000 and $532,000, respectively. At the end of each year, Peel Company had in its inventory one-fourth of the goods purchased from Seacore Company during that year. Peel Company reported $300,000 in net income from its independent operations in 2019 and 2020. Seacore Company reported net income of $130,000 in each year and did not declare any dividends in any year. There were no intercompany sales prior to 2019.

Required:

A. Prepare in general journal form all entries necessary on the consolidated financial statements workpaper to eliminate the effects of the intercompany sales for each of the years 2019 and 2020.

B. Calculate the amount of noncontrolling interest to be deducted from consolidated income in the consolidated income statement for 2020.

C. Calculate controlling interest in consolidated income for 2020.

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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