1.Prater Inc. owned 85% of the voting common stock of Harkin Corp. During 2021, Prater made severalsales of inventory to Harkin. The total selling price was $215,000 and the cost was $105,000. At the end ofthe year, 40% of the goods were still in Harkin's inventory. Harkin's reported net income was $400,000.Assuming there are no excess amortizations associated with the consolidation, and no other intra-entityasset transfers, what was the net income attributable to the noncontrolling interest in Harkin?51000534006000066600322502.Clark Corp. owned 75% of the voting common stock of Andrew Co. On January 3, 2020, Andrew sold aparcel of land to Clark. The land had a book value of $36,000 and was sold to Clark for $52,000. Andrew'sreported net income for 2020 was $123,000. Assuming there are no excess amortizations associated withthe consolidation, and no other intra-entity asset transfers, what is net income attributable to thenoncontrolling interest?1475026750277503075034750

Question OneStep 1:Calculate the gross profit on intra-entity salesStep 2:Determine the portion of…

Answered: 1.Prater Inc. owned 85% of the voting…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Please Assist in this question (a) During the current period SP Ltd sold inventory to its wholly owned subsidiary, Jaza Ltd, for $15 000. These items previously cost Sp Ltd $12 000. JazaLtd subsequently sold half the items to Nanjing Ltd for $8000. The tax rate is 30%. The group accountant for SP Ltd, Steve yu, maintains that the appropriate consolidation adjustment entries are as follows: Required (i) Discuss whether the entries suggested Steve Yu are correct, explaining on a line-by-line basis the correct adjustment entry. (ii)Determine the consolidation worksheet entries in the following year, assuming the inventory has been –sold, and explain the adjustments on a line-by-line basis. (b) On 1 July 2016 Henna Ltd sold an item of plant to Jordy Ltd for $450000 when its’ carrying value in Henna Ltd book was $600000 (costs $900000, accumulated depreciation $300000). This plant has a remaining useful life of five (5) years form the date of sale. The group measures its property plants and…
Jessica Ltd sold inventory during the current period to its wholly owned subsidiary, Amelie Ltd, for $15 000. These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for$8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriate consolidation adjustment entries are attached. Please answer: (i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry. (ii)Determine the consolidation worksheet entries in the following year, assuming the inventory has been –sold, and explain the adjustments on a line-by-line basis.
2.On Feb, 1, Johnson Co. agreed to sell the assets of its Formal Wear Division to Sun Hat Inc. The following additional facts pertain to the transaction: The Formal Wear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. The book value of Formal Wear's assets totaled $48 million on December 31, 2021. Formal Wear's operating income was a pre-tax loss of $10 million in 2021. Tango's income tax rate is 25%. Suppose that the Formal Wear Division's assets had not been sold by December 31, 2021, but were considered held for sale. Assume that the fair value of these assets was $40 million at December 31, 2021. In the income statement for the year ended December 31, 2021, Tango Co. would report discontinued operations of: A) $7.5 million loss. B) $10.0 million loss. C) $18 million loss. D) $13.5 million loss. .
Scarlet Company owns 80% of Tamara Corp.'s common stock. During October 2019 Tamara sold merchandise to Scarlet for 125,000. At December 31, 2019, one-half of the merchandise remained in Scarlet inventory. For 2019, gross profit percentages were 30% for Scarlet and 40% for Tamara. The amount of unrealized intercompany profit in ending inventory at December 31, 2019 that should be eliminated in consolidation is: O 20,000 O 18,750 O 25,000 O 50,000
Assume that, on January 1, 2021, Sycamore Corp. paid $2,040,000 for its investment in 36,000 shares of Starfish Inc. Further, assume that Starfish has 120,000 total shares of stock issued and estimates an eight-year remaining useful life and straight-line depreciation with no residual value for its depreciable assets. At January 1, 2021, the book value of Starfish's identifiable net assets was $7,060,000, and the fair value of Starfish was $10,000,000. The difference between Starfish's fair value and the book value of its identifiable net assets is attributable to $1,950,000 of land and the remainder to depreciable assets. Goodwill was not part of this transaction. The following information pertains to Starfish during 2021: Net Income $600,000 Dividends declared and paid $360,000 Market price of common stock on 12/31/2021 $ 80/share What amount would Sycamore Corp. report in its year-end 2021 balance sheet for its investment in Starfish Inc.? Multiple Choice $2,074,875. $2,220,000.…
On July 1, 2021, Gupta Corporation bought 30% of the outstanding common stock of VB Company for $170 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At the date of acquisition of the stock, VB’s net assets had a total fair value of $490 million and a book value of $220 million. Of the $270 million difference, $50 million was attributable to the appreciated value of inventory that was sold during the last half of 2021, $160 million was attributable to buildings that had a remaining depreciable life of 10 years, and $60 million related to equipment that had a remaining depreciable life of 5 years. Between July 1, 2021, and December 31, 2021, VB earned net income of $60 million and declared and paid cash dividends of $50 million. Required:1. Prepare all appropriate journal entries related to the investment during 2021, assuming Gupta accounts for this investment by the equity method. a. Record the purchase of VB company shares for $170.0…
Please include all steps of calculations for my reference. Thanks!
Sue Inc. acquires 80% of lan Co. for $500,000 on January 2, 2024. lan reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. lan Co. earns income and pays dividends as follows: 2024 2025 Net income $ 100,000 $120,000 $130,000 Dividends 40,000 50,000 60,000 Assume the equity method is applied. Compute the non-controlling interest in lan at December 31, 2024. O $135,600. $137,000. O $112,000. $100,000. 2026 O $118,600.

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