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Yosef Corporation acquired 8 0 % of the outstanding voting stock of Randeep Inc. on January 1 , Year 6 . During Year 6 ,
Yosef Corporation acquired of the outstanding voting stock of Randeep Inc. on January Year During Year intercompany sales of inventory of $original cost of $ were made. Only of this inventory was still held within the consolidated entity at the end of Year and was sold in Year Intercompany sales of inventory of $original cost of $ occurred in Year Of this merchandise, had not been resold to outside parties by the end of the year.
At the end of Year selected figures from the two companies' financial statements were as follows:
Yosef Randeep
Inventory $ $
Retained earnings, beginning of year
Net income
Dividends declared
Retained earnings, end of year
Yosef uses the cost method to account for its investment in Randeep. Both companies pay income tax at the rate of Required
a Assume that all intercompany sales were upstream. Calculate the amount to be reported on the Year consolidated financial statements for the following accountsitems:
i Consolidated net income
ii Consolidated net income attributable to the controlling and noncontrolling interest
iii Deferred income tax asset
iv Inventory
v Net adjustment to retained earnings at beginning of year pertaining to intercompany sales
vi Net adjustment to retained earnings at end of year pertaining to intercompany sales
b Now assume that all intercompany sales were downstream. Calculate the amount to be reported on the Year consolidated financial statements for the accountsitems listed in part a
Additional requirements
Make the following problem edits to the "required" below:
eliminate part a vi
replace part a v with the following requirement: Assume Randeep's retained earnings at acquisition date January Year was $ Calculate the Parent's Yosefs consolidated retained earnings balance at January Year AND December Year
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