Several years ago, Polar Inc. acquired an 80% interest in Icecap Co. The book values of Icecap's asset and liability accounts at that time were considered to be equal to their fair values. Polar's acquisition value corresponded to the underlying book value of Icecap so that no allocations or goodwill resulted from the transaction. The following selected account balances were from the individual financial records of these two companies as of December 31, 2023: Sales Cost of Goods Sold Operating Expenses Retained Earnings 1/1/23 Inventory Buildings (net) Investment income Polar Inc. $896,000 406,000 210,000 1,036,000 484,000 501,000 Not Given IceCap Inc. $504,000 276,000 147,000 252,000 154,000 220,000 Assume that Polar sold inventory to Icecap at a markup equal to 25% of cost. Intra-entity transfers were $130,000 in 2022 and $165,000 in 2023. Of this inventory, $39,000 of the 2022 transfers were in inventory at year end while $55,000 of the 2023 transfers were in inventory at year end. Required: For the consolidated financial statements for 2023, determine the balances that would appear for the following accounts: (1) Cost of Goods Sold, (2) Inventory, and (3) Non- controlling Interest in Subsidiary's Net Income.

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Several years ago, Polar Inc. acquired an 80% interest in Icecap Co. The book values of
Icecap's asset and liability accounts at that time were considered to be equal to their fair
values. Polar's acquisition value corresponded to the underlying book value of Icecap so
that no allocations or goodwill resulted from the transaction.
The following selected account balances were from the individual financial records of
these two companies as of December 31, 2023:
Sales
Cost of Goods Sold
Operating Expenses
Retained Earnings 1/1/23
Inventory
Buildings (net)
Investment income
Polar
Inc.
$896,000
406,000
210,000
1,036,000
484,000
501,000
Not Given
IceCap
Inc.
$504,000
276,000
147,000
252,000
154,000
220,000
Assume that Polar sold inventory to Icecap at a markup equal to 25% of cost. Intra-entity
transfers were $130,000 in 2022 and $165,000 in 2023. Of this inventory, $39,000 of the
2022 transfers were in inventory at year end while $55,000 of the 2023 transfers were in
inventory at year end.
Required:
For the consolidated financial statements for 2023, determine the balances that would
appear for the following accounts: (1) Cost of Goods Sold, (2) Inventory, and (3) Non-
controlling Interest in Subsidiary's Net Income.
Transcribed Image Text:Several years ago, Polar Inc. acquired an 80% interest in Icecap Co. The book values of Icecap's asset and liability accounts at that time were considered to be equal to their fair values. Polar's acquisition value corresponded to the underlying book value of Icecap so that no allocations or goodwill resulted from the transaction. The following selected account balances were from the individual financial records of these two companies as of December 31, 2023: Sales Cost of Goods Sold Operating Expenses Retained Earnings 1/1/23 Inventory Buildings (net) Investment income Polar Inc. $896,000 406,000 210,000 1,036,000 484,000 501,000 Not Given IceCap Inc. $504,000 276,000 147,000 252,000 154,000 220,000 Assume that Polar sold inventory to Icecap at a markup equal to 25% of cost. Intra-entity transfers were $130,000 in 2022 and $165,000 in 2023. Of this inventory, $39,000 of the 2022 transfers were in inventory at year end while $55,000 of the 2023 transfers were in inventory at year end. Required: For the consolidated financial statements for 2023, determine the balances that would appear for the following accounts: (1) Cost of Goods Sold, (2) Inventory, and (3) Non- controlling Interest in Subsidiary's Net Income.
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