1.) Abracada owns 90% interest of Deli Co. The following information are provided below: Abracada Co Deli Co Sales 2,000,000 5,400,000 Cost of goods sold (800,000) (2,700,000) Gross profit 1,200,000 2,700,000 Operating expenses (800,000) (500,000) Dividend Income 20,000 Net Income 400,000 2,240,000 Abracada Co. sold goods to Deli Co. for 60,000, 20% of these goods were sold for the year. Abracada also sold goods to Abracada Co. for 100,000, 20% of these goods were unsold at the end of the year. The ending inventory for Abracada Co is 240,000 and 100,000 for Deli Co. Compute for the non-controlling interest in Net Income.
1.) Abracada owns 90% interest of Deli Co. The following information are provided below: Abracada Co Deli Co Sales 2,000,000 5,400,000 Cost of goods sold (800,000) (2,700,000) Gross profit 1,200,000 2,700,000 Operating expenses (800,000) (500,000) Dividend Income 20,000 Net Income 400,000 2,240,000 Abracada Co. sold goods to Deli Co. for 60,000, 20% of these goods were sold for the year. Abracada also sold goods to Abracada Co. for 100,000, 20% of these goods were unsold at the end of the year. The ending inventory for Abracada Co is 240,000 and 100,000 for Deli Co. Compute for the non-controlling interest in Net Income.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1.) Abracada owns 90% interest of Deli Co. The following information are provided below:
| Abracada Co | Deli Co | |
| Sales | 2,000,000 | 5,400,000 |
| Cost of goods sold | (800,000) | (2,700,000) |
| Gross profit | 1,200,000 | 2,700,000 |
| Operating expenses | (800,000) | (500,000) |
| Dividend Income | 20,000 | |
| Net Income | 400,000 | 2,240,000 |
Abracada Co. sold goods to Deli Co. for 60,000, 20% of these goods were sold for the year. Abracada also sold goods to Abracada Co. for 100,000, 20% of these goods were unsold at the end of the year. The ending inventory for Abracada Co is 240,000 and 100,000 for Deli Co. Compute for the non-controlling interest in Net Income.
2.) On January 3, 2019 Abracada acquired 90% of Deli Co. at book value. The following information is available:
| 2020 | 2019 | |
| Ending inventory | 60,000 | 40,000 |
| Intercompany Cost of Goods sold | 120,000 | 120,000 |
| Downstream sale | 240,000 | 200,000 |
| Net income - Deli Co. | 450,000 | 400,000 |
| Net income - Abracada Co. | 1,100,000 | 1,000,000 |
What is the profit attributable to equity holders of parent or Controlling Interest in Net Income for 2020?
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