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Parson Company acquired an 8 0 percent interest in Syber Company on January 1 , 2 0 2 3 . Any portion of Syber's business
Parson Company acquired an percent interest in Syber Company on January Any portion of Syber's business fair value in
excess of its corresponding book value was assigned to trademarks. This intangible asset has subsequently undergone annual
amortization based on a year life. Over the past two years, regular intraentity inventory sales transpired between the two
companies. No payment has yet been made on the latest transfer. All dividends are paid in the same period as declared.
The individual financial statements for the two companies as well as consolidated totals for follow credit balances indicated by
parentheses:
Requlred:
a What method does Parson use to account for its investment in Syber?
b What is the balance of the intraentity inventory gross profit deferred at the end of the current period?
c What amount was originally allocated to the trademarks?
d What is the amount of the currentyear intraentity inventory sales?
e Were the intraentity inventory sales made upstream or downstream?
f What is the balance of the intraentity liability at the end of the current year?
g What amount of intraentity gross profit was deferred from the preceding period and recognized in the current period?
h What was the ending Noncontrolling Interest in Syber Company computed?
I. With a tax rate of percent, what income tax joumal entry is recorded if the companies prepare a consolidated tax return?
J With a tax rate of percent, what income tax joumal entry is recorded if these two companies prepare separate tax returns? Parson Company acquired an percent interest in Syber Company on January Any portion of Syber's business fair value in excess of its corresponding book value was assigned to trademarks. This intangible asset has subsequently undergone annual amortization based on a year life. Over the past two years, regular intraentity inventory sales transpired between the two companies. No payment has yet been made on the latest transfer. All dividends are paid in the same period as declared.
The individual financial statements for the two companies as well as consolidated totals for follow credit balances indicated by parentheses:
Accounts Parson Company Syber Company Consolidated Totals
Sales $ $ $
Cost of goods sold
Operating expenses
Income of Syber
Separate company net income $ $
Consolidated net income $
Net income attributable to noncontrolling interest
Net income attributable to Parson Company $
Retained earnings, $ $ $
Net income above
Dividends declared
Retained earnings, $ $ $
Cash and receivables $ $ $
Inventory
Investment in Syber Company
Land, buildings, and equipment
Trademarks
Total assets $ $ $
Liabilities $ $ $
Common stock
Additional paidin capital
Noncontrolling interest in Syber
Retained earnings above
Total liabilities and equities $ $ $
Required:
What method does Parson use to account for its investment in Syber?
What is the balance of the intraentity inventory gross profit deferred at the end of the current period?
What amount was originally allocated to the trademarks?
What is the amount of the currentyear intraentity inventory sales?
Were the intraentity inventory sales made upstream or downstream?
What is the balance of the intraentity liability at the end of the current year?
What amount of intraentity gross profit was deferred from the preceding period and recognized in the current period?
What was the ending Noncontrolling Interest in Syber Company computed?
With a tax rate of percent, what income tax journal entry is recorded if the companies prepare a consolidated tax return?
With a tax rate of percent, what income tax journal entry is recorded if these two companies prepare separate tax returns?
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