Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pilla Corporation acquired 80% ownership of Schilla Incorporated, at a time when Pilla's investment cost was equal to 80% of Schilla's book value. At the

image text in transcribedimage text in transcribed

image text in transcribedimage text in transcribed
Pilla Corporation acquired 80% ownership of Schilla Incorporated, at a time when Pilla's investment cost was equal to 80% of Schilla's book value. At the time of acquisition, the book values and fair values of Schilla's assets and liabilities were equal. Pilla uses the equity method. During 20X4, Pilla sold goods to Schilla for $160,000 making a gross profit percentage of 40%. Half of these goods remained unsold in Schilla's inventory at the end of the year. Income statement information for Pilla and Schilla for 20*4 were as follows: Pilla Schilla Sales Revenue $800,000 $300,000 Cost of Goods Sold 500,000 120,000 Operating Expenses 200,000 80,000 Separate incomes $100,000 $100,000 The 20X4 consolidated income statement showed cost of goods sold of: Select one: O a. $460,000 O b. $524,000 O c. $492,000 d. $620,000 O e. $452,000 What is Pilla's income from Schilla for 20X4? Select one: O a. $32,000 O b. $48,000 c. $80,000 O d. $132,000 O e. $68,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Carl Warren, William B. Tayler

15th edition

1337912026, 978-1337912020

More Books

Students also viewed these Accounting questions

Question

1. Practice giving the test before you actually use it.

Answered: 1 week ago

Question

How would you respond to each of the girls?

Answered: 1 week ago

Question

Context, i.e. the context of the information presented and received

Answered: 1 week ago