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Placid Lake Corporation acquired 70 percent of the outstanding votIng stock of Scenlc, Inc., on January 1, 2020, when Scenic had a net book value
Placid Lake Corporation acquired 70 percent of the outstanding votIng stock of Scenlc, Inc., on January 1, 2020, when Scenic had a net book value of $560,000. Any excess falr value was assigned to Intanglble assets and amortized at a rate of $4,000 per year. Placid Lake's 2021 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. Placld Lake declared $150,000 In dividends during this perlod; Scenic paid $56,000. At the end of 2021 , selected figures from the two companles' balance sheets were as follows: Durlng 2020 , 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 2020 . In 2021,$250,000 in Intra-entlty sales were made with an original cost of $75,000. Of this merchandise, 20 percent had not been resold to outside partles by the end of the year. Each of the following questions should be considered as an Independent situatlon for the year 2021. a. What is consolidated net Income for Placid Lake and Its subsidlary? b. If the Intra-entlty 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? d. What Is the consolidated balance in the ending Inventory account? e. Assume that no Intra-entity Inventory sales occurred between Placld Lake and Scenlc. Instead, In 2020, Scenic sold land costing $46,000 to Placld Lake for $82,000. On the 2021 consolidated balance sheet, what value should be reported for land? f-1. Assume that no Intra-entity Inventory or land sales occurred between Placld Lake and Scenic. Instead, on January 1, 2020, Scenic sold equipment (that originally cost $150,000 but had a $76,000 book value on that date) to Placld Lake for $102,000. At the time of sale, the equipment had a remalning useful IIfe of five years. What worksheet entrles are made for a December 31, 2021, consolidation of these two companles to eliminate the Impact of the Intra-entity transfer? f-2. Assume that no Intra-entlty Inventory or land sales occurred between Placid Lake and Scenic. Instead, on January 1, 2020, Scenlc sold equipment (that orlginally cost $150,000 but had a $76,000 book value on that date) to Placld Lake for $102,000. At the time of sale, the equipment had a remalning useful IIfe of five years. For 2021, what Is the noncontrolling Interest's share of ScenIc's net Income
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