ed Problem 7-28 (Static) (LO 7-5, 7-6) Parson Company acquired an 80 percent interest in Syber Company on January 1, 2020. Any portion of Syber's business fair value in excess of its corresponding book value was assigned to trademarks. This intangible asset has subsequently undergone annual amortization based on a 15-year life. Over the past two years, regular intra-entity inventory sales transpired between the two companies. No payment has yet been made on the latest transfer. All dividends are paid in the same period as declared. The individual financial statements for the two companies as well as consolidated totals for 2021 follow (credit balances indicated by parentheses): Sales Cost of goods sold Operating expenses Income of Syber Separate company net income Consolidated net income Net incone attributable to noncontrolling interest Net income attributable to Parson Conpany Retained earnings, 1/1/21 Net incone (above) Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in Syber Company Land, buildings, and equipment Trademarks Total assets Liabilities Common stock Additional paid-in capital Noncontrolling interest in Syber Retained earnings (above) Total liabilities and equities Parson Company $ (800,000) 500,000 100,000 (74,800) Syber $(600,000) 400,000 100,000 Consolidated Totals $(1,280,000) 784,000 $ (274,800) $(100,000) 202,500 e $ (293,500) 18,700 $ (274,800) (611,600) (274,880) 70,000 $(290,000) $ (611,600) $ (816,400) (100,000) 30,000 $(360,000) (274,800) 70,000 $ (816,400) $ 298,000 $ 80,000 358,000 190,000 160,000 338,000 368,400 e 380,000 260,000 640,000 8 0 32,500 $ 1,236,400 $ 500,000 $ 1,368,500 $ (270,000) (120,000) (30,000) 5 (60,000) (80,000) $ (310,000) (120,000) (30,000) 0 (92,100) (816,400) (360,000) $(1,236,400) $(500,000) (816,400) $(1,368,500) d a. What method does Parson use to account for its investment in Syber? b. What is the balance of the intra-entity inventory gross profit deferred at the end of the current period? c. What amount was originally allocated to the trademarks? d. What is the amount of the current-year intra-entity inventory sales? e. Were the intra-entity inventory sales made upstream or downstream? f. What is the balance of the intra-entity liability at the end of the current year? g. What amount of intra-entity gross profit was deferred from the preceding period and recognized in the current period? h. What was the ending Noncontrolling Interest in Syber Company computed? i. With a tax rate of 21 percent, what income tax journal entry is recorded if the companies prepare a consolidated tax return? j. With a tax rate of 21 percent, what income tax journal entry is recorded if these two companies prepare separate tax returns? Complete this question by entering your answers in the tabs below. Req A to H Req I and J a. What method does Parson use to account for its investment in Syber? b. What is the balance of the intra-entity inventory gross profit deferred at the end of the current period? c. What amount was originally allocated to the trademarks? d. What is the amount of the current-year intra-entity inventory sales? e. Were the intra-entity inventory sales made upstream or downstream? f. What is the balance of the intra-entity liability at the end of the current year? g. What amount of intra-entity gross profit was deferred from the preceding period and recognized in the current period? h. What was the ending Noncontrolling Interest in Syber Company computed? a. Method that Parson use to account for its investment b. Balance of the intra-entity inventory gross profit C Amount allocated to trademarks d. Current year intra-entity inventory sales e. Intra-entity inventory sales made f. Balance of the intra-entity liability g h. Intra-entity gross profit was deferred from the preceding period Ending noncontrolling interest Equity method Upstream * Reg I and J Show less & Req A to H Req I and I 1. With a tax rate of 21 percent, what income tax journal entry is recorded if the companies prepare a consolidated tax return? J. With a tax rate of 21 percent, what income tax journal entry is recorded if these two companies prepare separate tax returns? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction 1 1 2 2 3 3 General Journal