Question
On January 1, 2015, Sledge had common stock of $260,000 and retained earnings of $400,000. During that year, Sledge reported sales of $270,000, cost of
On January 1, 2015, Sledge had common stock of $260,000 and retained earnings of $400,000. During that year, Sledge reported sales of $270,000, cost of goods sold of $140,000, and operating expenses of $54,000. On January 1, 2013, Percy, Inc., acquired 80 percent of Sledges outstanding voting stock. At that date, $74,000 of the acquisition-date fair value was assigned to unrecorded contracts (with a 20-year life) and $34,000 to an undervalued building (with a 10-year life). In 2014, Sledge sold inventory costing $15,950 to Percy for $29,000. Of this merchandise, Percy continued to hold $8,000 at year-end. During 2015, Sledge transferred inventory costing $17,000 to Percy for $34,000. Percy still held half of these items at year-end. On January 1, 2014, Percy sold equipment to Sledge for $19,000. This asset originally cost $30,000 but had a January 1, 2014, book value of $11,800. At the time of transfer, the equipments remaining life was estimated to be five years. Percy has properly applied the equity method to the investment in Sledge. a. Prepare worksheet entries to consolidate these two companies as of December 31, 2015. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
b. | Compute the net income attributable to noncontrolling interest for 2015 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started