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San'la Corporation is 80 percent owned subsidiary of Panta Corporation, acquired by Panta on January 1, 20x1 for $320,000 when Santa's common stock and retained
San'la Corporation is 80 percent owned subsidiary of Panta Corporation, acquired by Panta on January 1, 20x1 for $320,000 when Santa's common stock and retained eamings were $100,000 and $160,000 respectively. All book values of Santa's assets and liabilities were equal to their fair values except inventory which was undervalued by $60.000 and unrecorded patent which its fair value is equal the remaining of differential value with remaining life of 10 years. Both finns are using FIFO method of inventory Followings are the transactions of merchandize hetween these two firms Cos! Sales value Ending Inventory 20x1 Panta sold to Santa 20X2 Panta sold to Santa S80.000 60.000 $100,000 80,000 $25,000 16,000 Panta Santa $40,00 Separate income inot included Investment income) for 20X1 S100,000 Dividend 15,000 8.0X10 Income statements for Panta and Santa Corporations for 20X2 are: Panta Santa Sales Income from Santa Cost of Sales 90,00%) Other expenses $300,000 $150,000 34,600 (211.000) Netlo Dividend 67001 (10.000 SSARI 0 0 Balance Sheet item (December 31, 20X2): Investment in Santa S368,800 Required: 1. Calculate total fair value of Santa as of 1/1/20X1 2. Calculate total value of the patent 3. Calculate investment income recorded by Pew for 20X1 4. Calculate balance of investment in Santa in the book of Panta as of Dec. 31, 20X1 5. Verify the amount 20x2 of Income from Santa for $34,600 6. Unrealized profit in Santa's beginning inventory is 7. Unrealized profit in Santa's ending inventory is II 8. Patent (net) that appear in the Dec 31, 20x2 consolidated halance sheet ( (show all of your calculations) $ 9. Verify the halance of investment in Santa that appear in the 20X2 Podhalance sheet S 10. How much investment in Santa is reported in the 20X2 consolidated balance sheet? 11. Minority Interest Income (Expense) for 20x2 (show all of your calculations is S 12. Consolidated controlling group) net income for 20X2 is 13. Show, in detail, working paper climinating entries for all inter-company merchandize inventory transactions in order to prepare 20x2 consolidated financial statements 14. Prepare Consolidated Income Statement for year 20X2
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