Problem 2 Patient Company holds 60% of Speedy Company stock Patient has sold inventory to Speedy Company as follows: Percent of Sold Sales Inventory Cost to Price to Held at Year Patient Speedy Year end 2017 $203,000 $355,000 30% 2018 $208,000 $312,000 40% 2019 $360,000 $450,000 35% 2020 $300,000 $500,000 20% The following balances were included in the individual financial statements of each company for the year ended 12/31/2020 Sales Cost of goods sold Merch inventory Patient Speedy $ 5,500,000 3,800,000 $ 3,570,000 2,300,000 $ 580,000 380,000 a. What will be reported as consolidated sales in the year 2020? b. What will be reported as consolidated inventory at 12/31/2020? c. What will be reported as consolidated cost of goods sold for 2020? d. Were the intra-entity sales of inventory items upstream or downstream? 85% $510,000 Public Company acquired of the common stock of Sample Company January 1, year one, for The consideration given was proportional to Sample's fair value On that date, Sample had the following trial balance account debit credit Additional paid in capital $100,000 Building (12-year life) $250,000 Common stock 170,000 Current assets 170,000 Equipment (6-yr life) 160,000 Land 110,000 Liabilities (due in 4 years 300,000 Retained earnings 1/year 1 120,000 Totals $690,000 $690,000 $60,000 $30,000 During year one, Sample reported net income of During year one, Sample paid dividends of During year two, Sample reported net income of During year two, Sample paid dividends of On January 1, year one, fair values were Land $146,000 Building $274,000 Equipment $172,000 $80,000 $40,000 There was no impairment of any goodwill arising from the acquisition Please indicate clearly which method you choose for Public to use to account for its acquisition of Sample Company. Problem 4. Use the data for the Public Company acquisition of the Sample Company to prepare the consolidation worksheet entries for December 31 of year one. For clarity, use the entry labels like S, A, I and so on. Problem 5. Use the data for the Public Company acquisition of the Sample Company to prepare the consolidation worksheet entries for December 31 of year two. E E