SP: Pilfer Company acquired 90 percent ownership of Scrooge Corporation in 2007 , at underlying book value. On that date, the fair value of noncontrolling interest was equal to 10 percent of the book value of Scrooge Corporation. Pilfer purchased inventory from Scrooge for $90,000 on August 20 , 2008 , and resold 70 percent of the inventory to unaffiliated companies on December 1, 2008, for $100,000. Scrooge produced the inventory sold to Pilfer for $67,000. The companies had no other transactions during 2008 . 1. Based on the information given above, what amount of sales will be reported in the 2008 consolidated income statement? A. $90,000 B. $120,000 C. $100,000 D. $67,000 c Why? reported sales rev from nonaffiliates is $100k, which is correct. 2. Based on the information given above, what amount of cost of goods sold will be reported in the 2008 consolidated income statement? A. $60,900 B. $90,000 C. $46,900 D. $67,000 c Why? Original CGS for actual sales to nonaffiliates =67k.7=46.9k. 3. Based on the information given above, what amount of consolidated net income will be assigned to the controlling interest for 2008? A. \$51,490 B. \$53,100 C. \$37,000 D. \$20,100 a Why? P's sep. inc. in ' 08=100k rev- 90k.7=63k CGS =37k S net inc. =90k - CGS, 67k=23k - unconfirmed upstream profit, .323k=6900 =S confirmed net inc, 16100 tot. cons. net inc. =53100 MI/NCI% of S inc, 1610 P's \% =51490. 4. Based on the information given above, what inventory balance will be reported by the consolidated entity on December 31,2008? A. $51,490 B. $53,100 C. $37,000 D. $20,100 d Why? The remaining inv on the Cons. B/S=67k.3=20100