from question 5 to 13.

1. On 1/1/2020, Choco Corp. acquired 90% of the voting common stock of Allie Inc. for $180,000 and the fair value of non-controlling interest (NCI) on acquisition date was $20,000. There is no control premium for Choco acquisition of Allie. Following is intra-entity inventory (downstream) sales between Choco and Allie in 2020 and 2021.

	2020	2021
Transfer price	$670,000	$500,000
Historical cost	$603,000	$425,000
% of intra-entity inventory sales unsold at the end of each year	30%	60%

• On 1/1/2020, Choco allocated the entire $70,000 excess fair value over book value of Allie as a Trademark (with an estimated remaining life of 5 years).
• Choco uses the equity method to account for its investment in Allie.
• Following is net income and dividends information for Choco and Allie in 2020 and 2021.

	2020		2021
	Choco	Allie	Choco	Allie
Net income	$550,000	$400,000	$650,000	$600,000
Dividends	$220,000	$100,000	$320,000	$120,000

• Book value of Allies net assets on 1/1/2020 is $130,000.

1) What was the deferred (=unrealized) profit from Chocos sales to Allie in 2020? (2 points)

: Transfer price = 670,000

Historical cost = 603,000

Unrealized profit = 670,000-603,000 = 67,000

Portion unsold = 67,000/40% = 26,800

2) What was the deferred (=unrealized) profit from Chocos sales to Allie in 2021? (2 points)

: Transfer price = 500,000

Historical cost = 425,000

Unrealized profit - 500,000-425,000 = 75,000

Portion unsold - 75,000/50% = 37,500

3) What is the investment in Allie in 12/31/2020? (6 points)

: Investment 1/20 = 180,000

Unadjusted Income = 360,000

Amortization of trade. - (70,000/7= 10,000*90%) = 9,000

Inventory = 26,800

Ending inventory = 37,500

Equity in adj. Inc. - (360,000-9,000-26,800) = 324,200

Total - (180,000+324,200) = 504,000

Dividends received - 504,000-(100,000*90% = 90,000) = 414,200

4) What is the investment in Allie in 12/31/2021? (7 points)

: Investment 12/31/20 = 414,200

Unadj.net income = 540,000

Amortization of trade. - (70,000/7= 10,000*90%) = 9,000

Inventory = 26,800

Ending inventory = 37,500

Equity in adj. Inc. - (540,000-9,000+26,800-37,500) = 520,300

Total - (414,200+520,300) = 934,500

Dividends received - 108,000-(120,000*90% = 108,000) = 826,500

5) What is the equity in Allies income in 12/31/2020? (4 points)

:

6) What is the equity in Allies income in 12/31/2021? (5 points)

:

7) What is the NCI balance on the consolidated balance sheet of 12/31/20? (6 points)

:

8) What is the NCI balance on the consolidated balance sheet of 12/31/21? (5 points)

:

9) Prepare a journal entry of consolidation entry G* for consolidated financial statement ending 12/31/2021(1 point)

Account Name	Dr.	Cr.

10) Prepare a journal entry of consolidation entry TI for consolidated financial statement ending 12/31/2021. (1 point)

Account Name	Dr.	Cr.

11. Prepare a journal entry of consolidation entry G for consolidated financial statement ending 12/31/2021. (1 point)

Account Name	Dr.	Cr.

12. During 2021, Allie's sales revenue was $900,000, and Choco's sales revenue was $1,100,000. What is the consolidated sales revenue on 12/31/2021? (4 points)

:

13. During 2021, Allie's cost of goods sold was $500,000, and Choco's cost of goods sold was $600,000. What is the consolidated cost of goods sold on 12/31/2021? (6 points)

:

everything is clear