Big purchased 90% of Little on 1/1/2019 for $171,000. Littles Stockholders Equity was $163,000. Any excess of fair value over cost is assigned to goodwill.

Little reported net income of $32,000 in 2019 and $40,000 in 2020. Little declares and pays dividends of $9,500 and $11,500 in 2019 and 2020, respectively.

Year	Inventory Cost	Inventory Transfer Price	Inventory at Year End Transfer Price
2019	34,500	57,500	12,500
2020	40,500	67,500	18,750
2021	46,400	80,000	25,000

12/31/2021 Balances

Account Title	Big	Little
Sales Revenues	(431,000)	(183,000)
Cost of Goods Sold	257,500	104,500
Expenses	92,700	33,500
Investment Income Little	(34,200)	----------
Net Income	(115,000)	(45,000)
Retained Earnings, 1/1/2021	(244,000)	(139,000)
Net Income (above)	(115,000)	(45,000)
Dividends Declared and Paid	68,000	13,500
Retained Earnings 12/31/2021	(291,000)	(170,500)
Cash and receivables	73,000	49,000
Inventory	127,500	68,000
Investment in Little	225,000	--------
Land, buildings, and equipment	482,000	164,000
Total Assets	907,500	281,000
Liabilities	(359,000)	(35,500)
Common Stock	(257,500)	(70,500)
Retained Earnings, 12/31/2021	(291,000)	(170,500)
Total liabilities and equities	(907,500)	(281,000)

Note: a. For test purpose, Bigs Investment Income Little and Net Income accounts are modified and do not accurately reflect the true amount of its equity in Littles earnings. b. Do not assume that the price paid by Big at the acquisition date represents the fair value of noncontrolling interest at the same date. No goodwill is allocated to NCI.

Complete the following:

The deferred gross profit for inventory transferred in 2020: _____________

The deferred gross profit for inventory transferred in 2021: _____________

For the following, assume that Big sells the inventory to Little:

Choose the correct option by placing an X over your choice:

[ ] [ ]

The inventory transfer is [upstream] [downstream]

Make the Consolidation Worksheet Entries TI, G and *G for December 31, 2021 and indicate whether the account adjustment is for Big (B) or Little (L) Companys books:

Entry TI:

Entry G:

Entry *G: Assuming that Big used the Equity Method for Internal Reporting

Determine Consolidated Cost of Goods Sold as of 12/31/2021: $___________________

Determine Consolidated Inventory as of 12/31/2021: $ _____________________

Determine Consolidated Sales as of 12/31/2021: $ _____________________

Determine the Noncontrolling Interest in Subsidiary 2021 Net Income: $___________

Determine the Noncontrolling Interest in Subsidiary as of 12/31/2021: $_____________

Make Consolidation entry S as of 12/31/2021:

For the next three requirements assume that Little sold the inventory to Big:

Determine the Noncontrolling Interest in Subsidiary 2021 Net Income: $ ___________

Determine the Noncontrolling interest in Subsidiary as of 12/31/2021: $______________

Make Consolidation entry S as of 12/31/2021: