lacid Lake Corporation acquired 80 percent of the outstanding voting stock of Scenic, Incorporated, On January 1, 2023, when Scenic ad a net book value of $420,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $5,000 per year. Pacid Lake's 2024 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity saies) was $320,000. Scenic reported net income of $130,000. Placid take declared $120,000 in dividends during this period; Scenic paid 542,000. At the end of 2024 , selected figures from the two compantes' balance sheets were as follows: buting 2023, intra-entity sales of $85,000 (original cost of $46,000 ) were made. Only 20 percent of this inventory was 5 till held within the consolldated entity at the end of 2023 . In 2024,$110,000 in intra-entity sales were made with an original cost of $61,000,0 or this merchandse, 30 percent had not been resold to outside parties by the end of the year. Each of the following questions should be considered as an independent situation for the year 2024. Required: a. What is consolidated net income for Placid Lake and its subsidiary? b. If the intra-entity sales were upstream, how would consolidated net income be allocated to the controlling and noncontrolling interest? c. If the intraientity sales wore downstieam, how would consolidated net income be allocated to the controlling ard noncontroliting intelest? d. What is the consolidated balance in the ending Inventary account? e. Assime that no intre- ontity inventory sales occurred between Placid Lake and Scenic Instead, in 2023, Scenic sold land costing $32.000 to Placid Lake for $4,000. On the 2024 consolidated balance sheet, what volue should be reported far fand? sold eouitment ithat oriainaliv cost $120.000 but had a $62000 book value on that datel fo Placid Lake for $84.000. At the fime o. What is consolidated net income for Placid Lake and lits subsidiary? b. If the intra-entity sales were upstream, how would consolidated net income be allocated to the controlling and noncontrolling interest? c. If the intra-entity sales were downstream, how would consolldated net income be allocated to the controlling and noncontrolling interest? d. What is the consolidated balance in the ending Inventory account? e. Assume that no intra-entity inventory sales occurred between Placid Lake and Scenic. Instead, in 2023, Scenic sold land costing $32.000 to Placid L.ake for $54.000. On the 2024 consolidated balance sheet, what value should be reported for land? f.1. Assume that no intra-entity inventory or land sales occurred between Placid Lake and Scenic. Instead, on January 1, 2023, Scenic sold equipment (that originally cost $120,000 but had a $62,000 book value on that date) to Placid Lake for $84,000. At the time of sale. the equipment had a iemaining useful tife of five years. What worksheet entries are made for a December 31,2024 . consolidation of these two companies to efliminate the impact of the intra-entity transfer? 6.2. Assume that no intra entity igventory or land sales occurred between Placid Lake and Scenic. Instead, on January 1, 2023, Scenic sold equipment (that originaly cost $120,000 but had a $62.000 book value on that date) to Placid L.ake for $84,000. At the time of sale, the equipment had a remaining useful life of tive years. For 2024, what is the noncontrolling interest's share of Scenic's net income? Complete this question by entering your answers in the tabs below. d. What is the consolidated balance in the ending Inventory account? e. Assume that no intra entity inventory sales occurred between Placid Like and Scenic, Instead, in 2023, Scenic sold land
