Lexus Corporation acquired

$7$

$0$

$$percent of Triumph Corporation's voting stock on January

$1$

$,$

$2$

$0$

$\backslash$times

$2$

$,$

$$for $

$2$

$8$

$0$

$,$

$0$

$0$

$0$

$.$

$$The fair value of the

noncontrolling interest was $

$1$

$2$

$0$

$,$

$0$

$0$

$0$

$$at the date of acquisition. Triumph reported common stock outstanding of $

$8$

$0$

$,$

$0$

$0$

$0$

$$and retained

earnings of $

$2$

$7$

$0$

$,$

$0$

$0$

$0$

$.$

$$The differential is assigned to buildings with an expected life of

$1$

$0$

$$years at the date of acquisition.

On December

$3$

$1$

$,$

$2$

$0$

$\backslash$times

$4$

$,$

$$Lexus had $

$1$

$0$

$,$

$0$

$0$

$0$

$$of unrealized profits on its books from inventory sales to Triumph, and Triumph had $

$1$

$5$

$,$

$0$

$0$

$0$

of unrealized profit on its books from inventory sales to Lexus. All inventory held at December

$3$

$1$

$,$

$2$

$0$

X

$4$

$,$

$$was sold during

$2$

$0$

$\backslash$times

$5$

$.$

On December

$3$

$1$

$,$

$2$

$0$

$\backslash$times

$5$

$,$

$$Lexus had $

$1$

$2$

$,$

$0$

$0$

$0$

$$of unrealized profit on its books from inventory sales to Triumph, and Triumph had unrealized

profit on its books of $

$2$

$8$

$,$

$0$

$0$

$0$

$$from inventory sales to Lexus.

In

$2$

$0$

$\backslash$times

$5$

$$Triumph reported net income of $

$1$

$6$

$0$

$,$

$0$

$0$

$0$

$.$

$$The amount Lexus will report as Income from Triumph Company for year

$2$

$0$

$\backslash$times

$5$

$$would

be:

$

$9$

$8$

$,$

$8$

$0$

$0$

$.$

$

$1$

$0$

$0$

$,$

$9$

$0$

$0$

$.$

$

$9$

$7$

$,$

$4$

$0$

$0$

$.$

$

$9$

$9$

$,$

$6$

$0$

$0$

$.$Question $9$

Lexus Corporation acquired $70$ percent of Triumph Corporation's voting stock on January $1,202,$ for $$280,000.$ The fair value of the

noncontrolling interest was $$120,000$ at the date of acquisition. Triumph reported common stock outstanding of $$80,000$ and retained

earnings of $$270,000.$ The differential is assigned to buildings with an expected life of $10$ years at the date of acquisition.

On December $31,204,$ Lexus had $$10,000$ of unrealized profits on its books from inventory sales to Triumph, and Triumph had $$15,000$

of unrealized profit on its books from inventory sales to Lexus. All inventory held at December $31,20$X$4,$ was sold during $205.$

On December $31,205,$ Lexus had $$12,000$ of unrealized profit on its books from inventory sales to Triumph, and Triumph had unrealized

profit on its books of $$28,000$ from inventory sales to Lexus.

In $205$ Triumph reported net income of $$160,000.$ The amount Lexus will report as Income from Triumph Company for year $205$ would

be:

$$98,800.$

$$100,900.$

$$97,400.$

$$99,600.$