Question
On January 1, 2014, Doone Corporation acquired 60 percent of the outstanding voting stock of Rockne Company for $312,000 consideration. At the acquisition date, the
On January 1, 2014, Doone Corporation acquired 60 percent of the outstanding voting stock of Rockne Company for $312,000 consideration. At the acquisition date, the fair value of the 40 percent noncontrolling interest was $208,000 and Rocknes assets and liabilities had a collective net fair value of $520,000. Doone uses the equity method in its internal records to account for its investment in Rockne. Rockne reports net income of $150,000 in 2015. Since being acquired, Rockne has regularly supplied inventory to Doone at 25 percent more than cost. Sales to Doone amounted to $210,000 in 2014 and $310,000 in 2015. Approximately 35 percent of the inventory purchased during any one year is not used until the following year. |
a. | What is the noncontrolling interests share of Rocknes 2015 income? |
Nocontrolling interest's share | ?????????????? |
b. | Prepare Doones 2015 consolidation entries required by the intra-entity inventory transfers. |
Consolidating Entries | Debit | Credit |
Retained earnings | ??? | |
Cost of goods sold | ??? |
Conslidating Entries | Debit | Credit |
Sales | ???? | |
Cost of goods sold | ???? |
Consolidating Entries | Debit | Credit |
Cost of goods sold | ???? | |
Inventory | ???? |
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