I almost completed everything, I verified my consolidation entries were all correct! Please help on the highlighted areas on the income statement and Balance sheet, thank you!!
Parent company acquired 80% of the stock of Subsidiary company on January 1, 2018, for $250,380. On this date, the balances of Subsidiary company's stockholders' equity accounts were:
Common Stock | $156,000 |
Retained Earnings | $31,200 |
On January 1, 2018, the fair value of the non-controlling interest was $61,620.
On January 1, 2018, the book and fair values of the assets were fairly stated but for the following items:
Item | Book Value | Fair Value | Useful Life |
Accounts Receivable | $39,000 | $33,800 | 1 year |
PPE, net | $65,000 | $88,400 | 6 years |
Licenses | $45,500 | $100,100 | 7 years |
Notes Payable | $26,000 | $18,200 | 4 years |
Other items of note:
- Each company sells to each other with a markup on sales of 25%. (Profit equals markup % times carrying value.) Both firms use FIFO for accounting for inventory.
- At the end of 2022, Parent had on hand materials purchased from Subsidiary valued at $10,400.
- Subsidiary had no inventory purchased from the parent on hand at the end of the 2022.
- At the end of 2021, Subsidiary had on hand materials purchased from Parent valued at $15,600.
- At the end of 2021, Parent had on hand materials purchased from Subsidiary valued at $5,000.
- At the end of 2022, Subsidiary owed the parent $5,200 for goods purchased from the Parent during 2022.
- Total sales between Parent and Subsidiary in 2022 totaled $15,000.
- On January 1, 2021, Parent sold equipment to subsidiary for $104,000. The book value of the equipment sold at the time of the sale was $84,500. It was estimated that the equipment sold had a remaining useful life of 6 years, no salvage value.
Calcuate Equity in Income in the bon below \begin{tabular}{|c|c|c|c|c|c|} \hline & Total & EquitainFll & NCI & & \\ \hline Subsidiaru Income & $28,600 & $22,880 & 5,720 & & \\ \hline Eliminate PPE qain on sale [Downstreami] & $3,250 & $3,250 & & i1 & \\ \hline Eliminate profit for Downsteam Beginning Inventory & $3,900 & $3,900 & & i2 & \\ \hline Eliminate Profit for Upstream Beqinninq Invenory & $1,250 & $1,000 & $250 & i3 & \\ \hline Upstream profit in El & {[2,600} & $2,080 & {[520} & i-4 & \\ \hline Depreciation Expense & $3,900 & $3,120 & (780 & 01 & \\ \hline Amortization Expense & $7,800 & $6,240 & 1,560 & 02 & \\ \hline & & & - & & \\ \hline & & & - & & \\ \hline & $22,700 & $19,590 & $3,110 & & Nentry for NCl \\ \hline OCl & Total & Equitgin2ll. & NCI & & \\ \hline Subsidiaru Reported Nl & {[1,000]} & $800 & {[200} & & \\ \hline & & & 0 & & \\ \hline & & & 0 & & \\ \hline & & (s:sonin & is:20ni) & & Nentry for OCl \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|} \hline Depreciation Expense & 15,600 & 13,000 & 02 & 3,900 & 3,250 & i1 & 29,250 \\ \hline Amortization Expense & & & 03 & 7,800 & & & 7,800 \\ \hline Operatinq expense & 201,500 & 49,400 & & & & & 250,900 \\ \hline Interest expense & 7,800 & 2,600 & & & & & 10,400 \\ \hline Noncontrolling interest in Nl & & & n & 3,110 & & & 3,110 \\ \hline Net Income Atributable to Parent & 106,690 & 28,600 & & & & & 112,910 \\ \hline Other comprehensive (income) loss & 2,000 & (1,000 & & & & & 1,000 \\ \hline Equity in OCL of Subsidiary & 18001 & & & & 800 & C & - \\ \hline Noncontrolling interest in OCL & & & & & 200 & n & \\ \hline Net other Comprehensive Income or [Loss] & $1,200 & & & 489,200 & 489,200 & & \\ \hline Net Comorehensive lncome & $107890 & & & & & & 113.910 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|l|}{ParentCorporationandSubsidiaryConsolidatedBalanceSheetForYearEndedDecember31,2022} \\ \hline \multicolumn{3}{|l|}{ Assets } \\ \hline Current Assets & $ & 446,600 \\ \hline Other Assets & $ & 204,100 \\ \hline PPE, net & $ & 271,700 \\ \hline Goodwill & $ & 34,200 \\ \hline Total Assets & $ & 956,600 \\ \hline \multicolumn{3}{|l|}{ Liabilities and Shareholder Equity } \\ \hline Current Liabilities & $ & 59,800 \\ \hline Long Term Liabilities & $ & 93,600 \\ \hline Total Liabilities & $ & 153,400 \\ \hline Shareholder Equity & $ & 187,200 \\ \hline Common Stock & $ & 325,000 \\ \hline Retained Earnings* & $ & 215,024 \\ \hline Accumulated Other Comprehensive Income & $ & \\ \hline Total Parent shareholder Equity & $ & 727,224 \\ \hline Noncontrolling Interest & $ & 75,976 \\ \hline Total Shareholder Equity & $ & 803,200 \\ \hline Total Liabilities and Shareholder Equity & $ & 956,600 \\ \hline \end{tabular} No work outside of the box will be graded *Remember to add current year earnings and dividends to beginning retained earnings. No work outside of the box will be graded * Combine NCI share of NI with NCI Share of OCI Loss