Question
XYZ acquired 60% of Water company on January 1 ,2019. At the time of acquisition, total excess fair value was attributed to customer base and
XYZ acquired 60% of Water company on January 1 ,2019. At the time of acquisition, total excess fair value was attributed to customer base and amortized at a rate of $15,000 per year. During 2019, XYZ sold goods with a cost of $595,000 for $850,000 to Water. Water still owned 10% of the goods at the end of the year. In 2020, XYZ sold goods with a cost of $800,000 to Water for $1,000,000, and Surfung still owned 28% of the goods at year-end.
Balances of 2020:
- Sales XYZ $6,000,000 Water $2,800,000
- COGS $4,200,000 $1,700,000
- Net Income Not given $1,100,000
A. Compute the consolidated sales for 2020
B. Compute the consolidated cost of goods for 2020
C. Compute the noncontroling interest in Water's income for 2020
D. Assume that the intra-entity sales were upstream ( assume that it was Water who sold inventory to XYZ), compute the nincontroling interest in Water's income for 2020.
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