Problem 5-20 (LO 5-3, 5-4, 5-5, 5-7) Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2014, for $440,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $615,000 and the fair value of the 20 percent noncontrolling interest was $110,000. No excess fair value over book value amortization accompanied the acquisition The following selected account balances are from the individual financial records of these two companies as of December 31, 2015 Seacraft $730,000 $450,000 242,000 114,000 270,000 119,000 166,000 Protrade Sales Cost of goods sold Operating expenses Retained earnings, 1/1/15 Inventory Buildings (net) Investment income 335,000 159,000 830,000 355,000 367,000 Not given Each of the following problems is an independent situation a. Assume that Protrade sells Seacraft inventory at a markup equal to 60 percent of cost. Intra-entity transfers were $99,000 in 2014 and $119,000 in 2015. Of this inventory, Seacraft retained and then sold $37,000 of the 2014 transfers in 2015 and held $51,000 of the 2015 transfers until 2016 Determine balances for the following items that would appear on consolidated financial statements for 2015 Cost of goods sold Inventory Net income attributable to noncontrolling interest b. Assume that Seacraft sells inventory to Protrade at a markup equal to 60 percent of cost. Intra-entity transfers were $59,000 in 2014 and $89,000 in 2015. Of this inventory, $30,000 of the 2014 transfers were retained and then sold by Protrade in 2015, whereas $44,000 of the 2015 transfers were held until 2016 Determine balances for the following items that would appear on consolidated financial statements for 2015: Cost of goods sold Inventory Net income attributable to noncontrolling interest c. Protrade sells Seacraft a building on January 1, 2014, for $98,000, although its book value was only $59,000 on this date. The building had a five-year remaining life and was to be depreciated using the straight-line method with no salvage value. Determine balances for the following items that would appear on consolidated financial statements for 2015: Buildings (net) Operating expenses