Company acquired a 70% interest in the Star Company in year 1. For the year ended 91. year 2, Star reported net income of $80,000. During year 2, Star Co. sold to Planet Co. for $10,000 at a profit of $2.000. The merchandise remained in Star's 23. Planet Company acquired a 70% interest in the Star December 31, year 2, Star reported net income o merchandise to Planet Co. for $10,000 at a profit of S2 at the end, of year 2. For consolidation purposes what is the noncontrolling interest's share of Star's net income for year 2? a. $23,400 b. S24,000 c. $24.600 d. $26,000 24. Ahm Corp. owns 90% of Bee Corp.'s common stock and 80% of Cee Corp.'s common stock. The remaining common shares of Bee and Cee are owned by their respective employees, Bee seis exclusively to Cee, Cee buys exclusively from Bee, and Cee sells exclusively to unrelated companies. Selected year 1 information for Bee and Cee follows: Bee Corp. Cee Corp. Sales S130,000 $91.000 Cost of sales 100,000 65.000 Beginning inventory None None Ending inventory None 65,000 What amount should be reported as gross profit in Bee and Cee's combined income statement for the year ended December 31, year 1? a. $26,000 b. S41,000 c. S47,800 d. $56,000 25. The following information pertains to shipments of merchandise from Home Office to Branch during year 1: Home Office's cost of merchandise $160,000 Intracompany billing 200,000 Sales by Branch 250,000 Unsold merchandise at Branch on December 31, year 1 20,000 In the combined income statement of Home Office and Branch for the year ended December 31, year 1, what amount of the above transactions should be included in sales? a. $250,000 b. $230,000 c. $200,000 d. $180,000 began operations on January 1. Year 4. $38,000 $5,000 26. Scroll. Inc., a wholly owned subsidiary of Pim, Inc. began operation The following information is from the condensed Year 4 income statea Sales to Scroll Pim Seroll Sales to others $100,000 400,000 300.000 $500,000 300,000 Cost of goods sold: Acquired from Pim 80.000 Acquired from others 350.000 190.000 Gross profit S150,000 $30,000 Depreciation 40.000 10,000 Other expenses 60.000 15.000 Income from operations $50,000 S5,000 Gain on sale of equipment to Scroll 12.000 Income before income taxes Additional Information: Sales by Pim to Scroll are made on the same terms as those made to third parties. Equipment purchased by Scroll from Pim for $36,000 on January 1, Year 4, is depreciated using the straight-line method over 4 years. In Pim's December 31. Year 4. consolidating worksheet. how much intercompany profit should be eliminated from Scroll's inventory? a. $30,000 b. S20,000 c. $10,000 d. $6,000 27. Scroll. Inc., a wholly owned subsidiary of Pim, Inc. began operations on January 1, Year 4. The following information is from the condensed Year 4 income statements: Pim Scroll Sales to Scroll S100,000 400,000 300.000 Sales to others $500,000 300,000 Cost of goods sold: 80,000 Acquired from Pim 350,000 190,000 Acquired from others Gross profit $150,000 $30,000 Depreciation 40,000 10,000 Other expenses 60,000 15.000 Income from operations $50,000 $5,000 Gain on sale of equipment to Scroll 12.000 Income before income taxes $38,000 $5,000 Additional Information: Sales by Pim to Scroll are made on the same terms as those made to third parties. Equipment purchased by Scroll from Pim for $36,000 on January 1, Year 4, is depreciated usir the straight-line method over 4 years. Scroll's depreciation on the equipment is determined ba Pim's original estimates of the asset's economic life and residual value. What amount should be reported as depreciation expense in Pim's consolidated income statement? a. $50,000 b. $47,000 c. S44,000 d. $41,000 28. Power Co. is a manufacturer and Slack Co., its 100%-owned subsidiary, is a retailer. The companies are vertically integrated. Thus, Slack purchases all of its inventory from Power. On January 1, Slack's inventory was $30.000. For the year ended December 31, its purchases were $150,000, and its cost of sales was $166,500. Power's sales to Slack reflect a 50% gross profit on sales. Slack then resells the goods to outside entities at a 40% gross profit on sales. At what amount should the intercompany inventory purchase be reported in the consolidated balance sheet at December 31? a. $16,500 b. $9,000 c. $13,500 d. $6,750