Question
Kindly, slove this in a way I can copy it and show steps clearly... thumbs up will be given Question 1: P Company owns 80%
Kindly, slove this in a way I can copy it and show steps clearly... thumbs up will be given
Question 1:
P Company owns 80% of the common stock of S Company. P sells merchandise to S at 20% above cost. During 2011 and 2012, intercompany sales amounted to $1,080,000 and $1,200,000 respectively. At the end of 2011, S had one-fifth of the goods purchased that year from P in its ending inventory. Ss 2012 ending inventory contained one-fourth of that years purchases from P. There were no intercompany sales prior to 2011.
P reported net income from its own operations of $720,000 in 2011 and $760,000 in 2012. S reported net income of $400,000 in 2011 and $460,000 in 2012. Neither company declared dividends in either year.
Required:
- Prepare in general journal form all entries necessary on the consolidated statements workpapers to eliminate the effects of the intercompany sales for both 2011 and 2012.
- Calculate controlling interest in consolidated net income for 2012.
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