Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Inc , on January 1, 2017, when Scenic had a net book value of $560,000 Any excess fair value was assigned to intangible assets and amortized at a rate of $4,000 per year Placid Lake's 2018 net income before consideration of its relationship with Scenic (and before adjustments for intra entity sales) was $460,000 Scenic reported net income of $270,000 Placid Lake declared $150,000 in dividends during this period Scenic paid $56,000 At the end of 2018, selected figures from the two companies' balance sheets were as follows Placid Lake Scenic Inventory $ 300,000 $ 106,000 Land 760,000 360,000 Equipment (net) 560,000 460,000 During 2017, intra entity sales of $155,000 (original cost of $74,000) were made Only 10 percent of this inventory was still held within the consolidated entity at the end of 2017 In 2018, $250,000 in intra entity sales were made with an original cost of $75,000 Of this merchandise, 20 percent had not been resold to outside parties by the end of the year What is consolidated net income for Placid Lake and its subsidiary If the intra entity sales were upstream, how would consolidated net income be allocated to the controlling and noncontrolling interest If the intra entity sales were downstream, how would consolidated net income be allocated to the controlling and noncontrolling interest What is the consolidated balance in the ending Inventory account Assume that no intra entity inventory sales occurred between Placid Lake and Scenic Instead, in 2017, Scenic sold land costing $46,000 to Placid Lake for $82,000 On the 2018 consolidated balance sheet, what value should be reported for land f 1 Assume that no intra entity inventory or land sales occurred between Placid Lake and Scenic Instead, on January 1, 2017, Scenic sold equipment (that originally cost $150,000 but had a $76,000 book value on that date) to Placid Lake for $102,000 At the time of sale, the equipment had a remaining useful life of five years What worksheet entries are made for a December 31, 2018, consolidation of these two companies to eliminate the impact of the intra entity transfer f 2 For 2018, what is the noncontrolling interests share of Scenics net income Assume that no intra entity inventory or land sales occurred between Placid Lake and Scenic Instead, on January 1, 2017, Scenic sold equipment (that originally cost $150,000 but had a $76,000 book value on that date) to Placid Lake for $102,000 At the time of sale, the equipment had a remaining useful life of five years What worksheet entries are made for a December 31, 2018, consolidation of these two companies to eliminate the impact of the intra entity transfer (If no entry is required for a transaction event, select No journal entry required in the first account field ) Req A Req B and C Reg D and E Req F1 Req F2 What is consolidated net income for Placid Lake and its subsidiary Consolidated net income Req A Req B and C Reg D and E Req F1 Req F2 b If the intra entity sales were upstream, how would consolidated net income be allocated to the controlling and noncontrolling interest c If the intra entity sales were downstream, how would consolidated net income be allocated to the controlling and noncontrolling interest Show less Controlling Interest Non controlling Interest b Upstream c Downstream Reg A Req B and C Reg D and E Req F1 Req F2 d What is the consolidated balance in the ending Inventory account e Assume that no intra entity inventory sales occurred between Placid Lake and Scenic Instead, in 2017, Scenic sold land costing $46,000 to Placid Lake for $82,000 On the 2018 consolidated balance sheet, what value should be reported for land d Consolidated inventory e Consolidated land balance Consolidation Worksheet Entries 2 Prepare entry TA Note Enter debits before credits Transaction Accounts Debit Credit Consolidation Worksheet Entries Prepare entry ED Note Enter debits before credits Transaction Accounts Debit Credit

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 20, 2024

Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2017, when Scenic had a net book value

Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2017, when Scenic had a net book value of $560,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $4,000 per year.

Placid Lake's 2018 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $460,000. Scenic reported net income of $270,000. Placid Lake declared $150,000 in dividends during this period; Scenic paid $56,000. At the end of 2018, selected figures from the two companies' balance sheets were as follows:

	Placid Lake		Scenic
Inventory	$	300,000	$	106,000
Land		760,000		360,000
Equipment (net)		560,000		460,000

During 2017, intra-entity sales of $155,000 (original cost of $74,000) were made. Only 10 percent of this inventory was still held within the consolidated entity at the end of 2017. In 2018, $250,000 in intra-entity sales were made with an original cost of $75,000. Of this merchandise, 20 percent had not been resold to outside parties by the end of the year.

What is consolidated net income for Placid Lake and its subsidiary?
If the intra-entity sales were upstream, how would consolidated net income be allocated to the controlling and noncontrolling interest?
If the intra-entity sales were downstream, how would consolidated net income be allocated to the controlling and noncontrolling interest?
What is the consolidated balance in the ending Inventory account?
Assume that no intra-entity inventory sales occurred between Placid Lake and Scenic. Instead, in 2017, Scenic sold land costing $46,000 to Placid Lake for $82,000. On the 2018 consolidated balance sheet, what value should be reported for land?

f-1. Assume that no intra-entity inventory or land sales occurred between Placid Lake and Scenic. Instead, on January 1, 2017, Scenic sold equipment (that originally cost $150,000 but had a $76,000 book value on that date) to Placid Lake for $102,000. At the time of sale, the equipment had a remaining useful life of five years. What worksheet entries are made for a December 31, 2018, consolidation of these two companies to eliminate the impact of the intra-entity transfer?
f-2. For 2018, what is the noncontrolling interests share of Scenics net income?Assume that no intra-entity inventory or land sales occurred between Placid Lake and Scenic. Instead, on January 1, 2017, Scenic sold equipment (that originally cost $150,000 but had a $76,000 book value on that date) to Placid Lake for $102,000. At the time of sale, the equipment had a remaining useful life of five years. What worksheet entries are made for a December 31, 2018, consolidation of these two companies to eliminate the impact of the intra-entity transfer? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Req A Req B and C Reg D and E Req F1 Req F2 What is consolidated net income for Placid Lake and its subsidiary? Consolidated net income Req A Req B and C Reg D and E Req F1 Req F2 b. If the intra-entity sales were upstream, how would consolidated net income be allocated to the controlling and noncontrolling interest? c. If the intra-entity sales were downstream, how would consolidated net income be allocated to the controlling and noncontrolling interest? Show less Controlling Interest Non-controlling Interest b. Upstream c. Downstream Reg A Req B and C Reg D and E Req F1 Req F2 d. What is the consolidated balance in the ending Inventory account? e. Assume that no intra-entity inventory sales occurred between Placid Lake and Scenic. Instead, in 2017, Scenic sold land costing $46,000 to Placid Lake for $82,000. On the 2018 consolidated balance sheet, what value should be reported for land? d. Consolidated inventory e. Consolidated land balance Consolidation Worksheet Entries 2 Prepare entry *TA Note: Enter debits before credits. Transaction Accounts Debit Credit Consolidation Worksheet Entries Prepare entry ED Note: Enter debits before credits. Transaction Accounts Debit Credit