please help with the below questions
Panda Corporation purchased 75% of Saratoga Industries' common stock on January 2, 2019. On January 1, 2020, Saratoga sold equipment to Panda that had a net book value of $40,000 and an original cost of $60,000 for $50,000. On January 1, 2020, Panda sold a building to Saratoga that had a net book value of $500,000 and an original cost of $625,000 for $750,000. The equipment had a remaining useful life of 8 years, and the building had a remaining useful life of 20 years. Neither asset had salvage value. Both companies use straight-line depreciation. Selected account balances are shown below for Panda and Saratoga for the year ended December 31, 2020: Panda Saratoga Sales $700,000 $690,000 Cost of Goods Sold 450,000 250,000 Other Expenses 150,000 75,000 Building - net 1,400,000 712,500 Equipment - net 790,000 467,500 Gain on sale 250,000 10,000 Required: 1. Calculate the following balances for the year ended December 31, 2020: a. Consolidated "Other Expenses" b. Consolidated Buildings c. Consolidated Equipment 2. Calculate consolidated net income and controlling share of consolidated net income for 2020. 3. Prepare consolidation working paper entry to eliminate Income from subsidiary-parent share. No dividends were declared or paid. Panda Corporation purchased 75% of Saratoga Industries' common stock on January 2, 2019. On January 1, 2020, Saratoga sold equipment to Panda that had a net book value of $40,000 and an original cost of $60,000 for $50,000. On January 1, 2020, Panda sold a building to Saratoga that had a net book value of $500,000 and an original cost of $625,000 for $750,000. The equipment had a remaining useful life of 8 years, and the building had a remaining useful life of 20 years. Neither asset had salvage value. Both companies use straight-line depreciation. Selected account balances are shown below for Panda and Saratoga for the year ended December 31, 2020 Panda Saratoga Sales $700,000 $690,000 Cost of Goods Sold 450,000 250,000 Other Expenses 150,000 75,000 Building - net 1,400,000 712,500 Equipment - net 790,000 467,500 Gain on sale 250,000 10,000 Required: 1. Calculate the following balances for the year ended December 31, 2020: a. Consolidated "Other Expenses" b. Consolidated Buildings c. Consolidated Equipment 2. Calculate consolidated net income and controlling share of consolidated net income for 2020. 3. Prepare consolidation working paper entry to eliminate Income from subsidiary-parent share. No dividends were declared or paid. (15.4 Marks) Question 3 (34 marks) A-Habiba Company has a single branch in Southwest. On March 1, 2020, the home office accounting records included an Allowance for Overvaluation of Inventories: Southwest Branch ledger account with a credit balance of $32,000. During March, the following transactions occurred: 1- On March 4, the home office shipped merchandise costing $66,000 to the Southwest Branch and billed it at a price representing a 40% markup on the billed price. 2- On March 8, the branch sold 70% of the merchandise received from the home office on march 4 for $90,000 cash. 3- On March 15, the branch sold 20% of the merchandise received from the home office on march 4 to Hope company for $30,000 on credit. On March 22, the home office informed the branch that it had collected 50% of the amount owed by Hope company. 5- On March 28, the branch paid operating expenses of $10,000 cash. 6- On March 29, Hope company paid the remaining amount due to Southwest branch, 7- On March 30, the home office allocated operating expenses of $4,000 to the branch. Required: 1) Prepare a working paper for the home office to analyze the flow of merchandise to Southwest branch during March 2020. 2) Prepare all required entries, including closing and adjusting entries, for the foregoing intracompany transactions in the accounting records of (a) the home office and (b) the Southwest Branch. Reconstruct a three-column ledger account Allowance for overvaluation of inventories: Southwest branch for the home office of Habiba Company
