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Hello, can someone help me on the following question? Thank you! Exercise 2 Worksheet: Intra-Entity Transfer Account Balances On January 1, 2015, Panther Incorporated purchased
Hello, can someone help me on the following question? Thank you!
Exercise 2 Worksheet: Intra-Entity Transfer Account Balances | ||
On January 1, 2015, Panther Incorporated purchased 80% of the Staffer Companys outstanding voting stock for $840,000 in cash and other considerations. On that date, Panther assessed the net fair value of Staffers identifiable liabilities and assets at $1,050,000. The 20% noncontrolling interest was assessed at a fair value of $210,000. Amortization of excess fair value over book value was not part of the acquisition. On December 31, 2016, each companys financial records included the account balances shown below in Table 1. | ||
Table 1: Account Balances for Year Ending December 31, 2016 | ||
Account | Panther | Staffer |
Sales | $ 1,280,000 | $ 720,000 |
Cost of goods sold | $ 580,000 | $ 394,000 |
Operating expenses | $ 300,000 | $ 210,000 |
Retained earnings, January 1, 2016 | $ 1,480,000 | $ 360,000 |
Inventory | $ 692,000 | $ 220,000 |
Buildings (net) | $ 716,000 | $ 314,000 |
Investment income | Not provided | $ - |
Compute selected balances based on the following intra-entity asset transfer scenario: | ||
1. Assume Panther sells Staffer inventory at a markup that equals 40% of the cost. In 2015, intra-entity transfers were $180,000. In 2016, they were $220,000. Of the inventory, Staffer retained, then sold, $56,000 of the 2015 transfers in 2016 and held $84,000 of the 2016 transfers until 2017. Determine the account balances for the accounts shown below that will appear on 2016 consolidated financial statements: Cost of goods sold. Inventory. Noncontrolling interest in Staffers net income. You may use Table 2 below as a worksheet. | ||
Table 2. Worksheet | ||
Consolidated Cost of Goods Sold | Balance | This cell intentionally left blank. |
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Consolidated Inventory | Balance | This cell intentionally left blank. |
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Noncontrolling Interest in Staffers Net Income | Balance | This cell intentionally left blank. |
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