$.$ Cost Method Consolidations with AAP & Intercompany Transactions $(38$ points$)$

Paramour Corp. acquired $90$ percent of the stock of Swain, Inc. on January $1,2017,$ for $$230,000.$ On this date, the balances of Swain's stockholders' equity accounts were Common Stock, $$80,000,$ and Retained Earnings, $$40,500.$ On January $1,2015,$ the market value for the $10\%$ of shares not purchased by Paramour was $$20,500.$

On January $1,2017,$ Swain$$s recorded book values were equal to fair values for all items except four: $(1)$ accounts receivable had a book value of $$30,000$ and a fair value of $$22,000,(2)$ property, plant & equipment, net had a book value of $$48,000$ and a fair value of $$95,600,(3)$ trademarks had a book value of $$39,800$ and a fair value of $$71,400,$ and $(4)$ notes payable had a book value of $$23,000$ and a fair value of $$17,200.$ Both companies use the FIFO inventory method and sell all of their inventories at least once per year. The year$-$end net balance of trade receivables are collected in the following year. On the acquisition date, Swain$$s property, plant & equipment, net had a remaining useful life of $7$ years, the trademarks had a remaining useful life of $4$ years, and notes payable had a remaining term of $2$ years.

Each company routinely sells merchandise to the other company, with a profit margin of $30$ percent of selling price $($regardless of the direction of the sale$).$

During $2018,$ intercompany sales $($from Swain to Paramour$)$ amounted to $$16,500,$ of which $$10,400$ of merchandize remained in Paramour$$s ending inventory on December $31,2018.$ Also, on December $31,2018,$ $$7,500$ of these intercompany sales remained unpaid.

During $2019,$ intercompany sales $($from Paramour to Swain$)$ amounted to $$28,200,$ of which $$18,800$ of merchandise remains in the ending inventory of Swain on December $31,2019.$ Also, on December $31,2019,$ $$9,000$ of these intercompany sales remained unpaid.

Paramour accounts for its Equity Investment in Swain using the cost method.

The pre$-$consolidation financial statements for the two companies for the year ended December $31,2019,$ along with the AAP amortization schedule, are provided below:

Exam B Part $1.$pdf

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$1$ a$)$ What is consolidated Sales for $2019$

Flag question: Question $2$

Question $24$ pts

$1$ b$)$ What is consolidated Cost of Goods Sold for $2019$

Flag question: Question $3$

Question $34$ pts

$1$ c$)$ What is consolidated Depreciation & Amortization Expense for $2019.$

Flag question: Question $4$

Question $44$ pts

$1$ d$)$ What is the consolidated balance for Accounts Receivable, net at December $31,2019.$

Flag question: Question $5$

Question $54$ pts

$1$ e$)$ What is the consolidated balance for Property, Plant and Equipment, net at December $31,2019.$

Flag question: Question $6$

Question $64$ pts

$1$ f$)$ What is the consolidated balance for Trademarks, net at December $31,2019.$

Flag question: Question $7$

Question $74$ pts

$1$ g$)$ What is the consolidated balance for Inventories, net at December $31,2019.$

Flag question: Question $8$

Question $85$ pts

$1$ h$)$ What is the Income Attributable to the Noncontrolling Interest for $2019.$

Flag question: Question $9$ Income Statement

Sales

Cost of Goods Sold

Gross Profit

Depreciation & Amort Expense

Operating Expenses

Interest Expense

Total expenses

Income $($loss$)$ from Swain

Net income

Retained Earnings Statement

BOY retained earnings

Net income

Dividends

EOY retained earnings

Balance Sheet

Cash

Accounts receivable

Inventories

PPE, net

Other assets

Trademarks

Investment in Swain

Total Assets

Accounts Payable

Notes Payable

Other liabilities

Common Stock

Retained Earnings

Total Liabilities and Equity

$\backslash$table$[[245,000,87,000],[77,600,31,920],[(54,000),(22,000)],[268,600,96,920]]$

Question $95$ pts

$1$ i$)$ What is the Income Attributable to the Controlling Interest for $2019.$