Following are the 2018 financial statements for these three companles. Stookey has transferred numerous amounts of Inventory to Yarrow since the takeover amounting to $100,000 (2017) and $125,000 (2018). These transactions Include the same markup applicable to Stookey's outside sales. In each year, Yarrow carried 20 percent of this Inventory Into the succeeding year before disposing of it. An effective tax rate of 40 percent is applicable to all companies. All dividend declarations are paid in the same period. $ Yarrow Company (677,000) 361,000 90,00 (226,000) (678,000) (226,eee) Stookey Company $ (520,000) 312,00 104,000 $ (184,000) $ (390,000) (194,000) $ $ Travers Company $(1,eee,eee) 533, eee 111,000 (356,000) $ (800,000) (356,000) 142,400 $(1,613,600) $ 505, eee 810,000 $ Sales Cost of goods sold Operating expenses Net income Retained earnings, 1/1/18 Net income (above) Dividends declared Retained earnings, 12/31/18 Current assets Investment in Yarrow Company Investment in Stookey Company Land, buildings, and equipment (net) Total assets Liabilities Common stock Retained earnings, 12/31/18 Total liabilities and equities $ (984,080) 429, eee $ (494,000) $ 346,700 $ 1,068,000 $ 2,383, eee $ (869,400) (500,000) (1,613,680) $(2,383, eee) 424, eee 856, eee $ 1,799,000 $ (493,000) (312,00) (984,00) $(1,799,000) 514,00 $ 860,700 $ (166,700) (200,000) (494,00) $ (860,700) Note: Parentheses Indicate a credit balance. a. Prepare the business combination's 2018 consolidation worksheet; ignore Income tax effects. b. Determine the amount of Income tax for Travers and Yarrow on a consolidated tax return for 2018. c. Determine the amount of Stookey's Income tax on a separate tax return for 2018. d. Based on the answers to requirements (b) and (c), what journal entry does this combination make to record 2018 Income tax? Complete this question by entering your answers in the tabs below. Req A Reg B and c Reg D Prepare the business combination's 2018 consolidation worksheet; ignore income tax effects. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign. Round your answers to nearest whole dollar amount. ) Show less Accounts TRAVERS COMPANY AND CONSOLIDATED SUBSIDIARIES Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Noncontrolling Consolidated Travers Yarrow Stookey Debit Credit Interest Balance Company Company Company (1,000,000) (677,000) (520,000) 533.000 361.000 312.000 111,000 90.000 104.000 (356,000) (226,000) (104,000) 01 0 (800,000) (678.000) (390,000) (104.000) (226,000) Sales and other revenue Cost of goods sold Operating expenses Separate company net income Consolidated net income Net income attributable to NCI (Yarrow) Net income attributable to NCI (Stookey) Net income attributable to Travers Company Retained earnings. 1/1/18 Travers Company Yarrow Company Stookey Company Net income (above) Dividends declared Retained earnings, 12/31/18 Current assets Investment in Yarrow Company Investment in Stookey Company Land, buildings. & equipment (net) Copyright Customer list Total assets Liabilities Common stock Retained earnings 12/31/18 (above) NCI interest in Stookey. 1/1/18 Noncontrolling interest in Yarrow, 1/1/18 Noncontrolling interests in subsidiaries Total liabilities and equities (356,000) 142.400 (1.013.800) 505,000 810.000 (904,000) 429,000 (404.000) 346,700 424,000 850,000 1,068,000 514,000 0 2.383.000 (869,400) (500,000) (1.013.800) 1,709,000 (493,000) (312,000 (904.000) 860.700 (166,700) (200,000) (494,000) (2.383.000) (1.709,000) (860.700) 0 Complete this question by entering your answers in the tabs below. Req A Reg B and C ReqD b. Determine the amount of income tax for Travers and Yarrow on a consolidated tax return for 2018. c. Determine the amount of Stookey's income tax on a separate tax return for 2018. b. Income tax payable Income tax payable C Based on the answers to requirements (b) and (C), what journal entry does this combination make to record 2018 income tax? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet
