Question
Carroll Company sells all its output at 25 percent above cost. Pacific Corporation purchases all its inventory from Carroll. Selected information on the operations of
| Carroll Company sells all its output at 25 percent above cost. Pacific Corporation purchases all its inventory from Carroll. Selected information on the operations of the companies over the past three years is as follows: |
| Carroll Company | Pacific Corporation | |||
| Year | Sales to Pacific Corp. | Net Income | Inventory, Dec. 31 | Operating Income |
| 20X2 | $205,000 | $115,000 | $ 71,750 | $166,000 |
| 20X3 | 180,000 | 105,000 | 108,000 | 251,000 |
| 20X4 | 273,000 | 175,000 | 145,600 | 313,000 |
| Pacific acquired 70 percent of the ownership of Carroll on January 1, 20X1, at underlying book value. |
| Required: |
| Compute consolidated net income and income assigned to the controlling interest for 20X2, 20X3, and 20X4. |
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Accounting Tools for Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
5th edition
9780470418239, 470239808, 9780470239803, 470418230, 978-1118128169
