Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Baxter, Inc., owns 90 percent of Wisconsin, Inc., and 20 percent of Cleveland Company. Wisconsin, In turn, holds 60 percent of Cleveland's outstanding stock. No
Baxter, Inc., owns 90 percent of Wisconsin, Inc., and 20 percent of Cleveland Company. Wisconsin, In turn, holds 60 percent of Cleveland's outstanding stock. No excess amortization resulted from these acquisitions. During the current year, Cleveland sold a varlety of Inventory items to Wisconsin for $40,000, although the original cost was $30,000. Of this total, Wisconsin still held $12,000 In Inventory (at transfer price) at year-end. During this same period, Wisconsin sold merchandise to Baxter for $100,000, although the original cost was only $70,000. At year- end, 540,000 of these goods (at the transfer price) was still on hand. The Initial value method was used to record each of these investments. None of the companies holds any other investments. Using the following separate income statements, determine the figures that would appear on a consolidated Income statement: (Input all amounts as positive values.) Baxter Wisconsin Cleveland $(1,600,000) $ (450,000) $ (280,000) 670,000 280,000 190,000 110,000 60,000 30,000 Sales Cost of goods sold Expenses Dividend income: Wisconsin Cleveland Net income (36,000) (4,000) (12,600) $ (260,880) $ (122,000) $ (62,680) Amounts Sales Cost of goods sold Expenses Dividend income Consolidated net income Noncontrolling interests in subsidiaries' income Controlling interest in consolidated net income
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started