Ajax Corporation purchased at book value 70 percent of Beta Corporation's ownership and 90 percent of Cole Corporation'sownership in 20X5. At the dates the ownership was acquired, the fair value of the noncontrolling interest was equal to a proportionateshare of book value. There are frequent intercompany transfers among the companies. Activity relevant to 20X8 follows:ProducerBeta CorporationCole CorporationAjax CorporationBeta CorporationCole CorporationYearProduction CostTransfer Price Unsold at End of Year Year Sold$30,00066,000BuyerAjax CorporationBeta Corporation20X7$36,000$12,00020X820x778,00020XB19,5008,20013,00020x821,00069,00033,000Beta CorporationCole CorporationAjax Corporation41,00078,00051,00020х920x820X920x817,00020X9For the year ended December 31, 20X8, Ajax reported $98,000 of income from its separate operations (excluding income fromintercorporate investments), Beta reported net income of $54,500, and Cole reported net income of $21,000.Required:a. Compute the amount to be reported as consolidated net income for 20X8. (Do not round intermediate calculations.)Consolidated net income$ 166,000b. Compute the amount to be reported as inventory in the December 31, 20X8, consolidated balance sheet for the preceding items.(Do not round intermediate calculations.)Inventoryc. Compute the amount to be reported as income assigned to noncontrolling shareholders in the 20X8 consolidated incomestatement. (Do not round intermediate calculations.)

Ajax Corporation purchased at book value 70 percent of Beta Corporation's ownership and 90 percent of Cole Corporation's ownership in 20X5. At the dates the ownership was acquired, the fair value of the noncontrolling interest was equal to a proportionate share of book value. There are frequent intercompany transfers among the companies. Activity relevant to 20X8 follows: Year Producer Production Cost Transfer Price Unsold at End of Year Year Sold Buyer Ajax Corporation Beta Corporation Beta Corporation Cole Corporation Ajax Corporation $12,000 19,500 20X7 Beta Corporation Cole Corporation Ajax Corporation Beta Corporation Cole Corporation $30,000 $36,000 20X8 66,000 21,000 69,000 33,000 20x7 78,000 41,000 20X8 20X8 8,200 13,000 17,000 20х9 78,000 51,000 20x8 20X9 20x8 20х9 For the year ended December 31, 20X8, Ajax reported $98,000 of income from its separate operations (excluding income from intercorporate investments), Beta reported net income of $54,500, and Cole reported net income of $21,000.

Ajax Corporation purchased at book value 70 percent of Beta Corporation's ownership and 90 percent of Cole Corporation's ownership in 20X5. At the dates the ownership was acquired, the fair value of the noncontrolling interest was equal to a proportionate share of book value. There are frequent intercompany transfers among the companies. Activity relevant to 20X8 follows: Year Producer Production Cost Transfer Price Unsold at End of Year Year Sold Buyer Ajax Corporation Beta Corporation Beta Corporation Cole Corporation Ajax Corporation $12,000 19,500 20X7 Beta Corporation Cole Corporation Ajax Corporation Beta Corporation Cole Corporation $30,000 $36,000 20X8 66,000 21,000 69,000 33,000 20x7 78,000 41,000 20X8 20X8 8,200 13,000 17,000 20х9 78,000 51,000 20x8 20X9 20x8 20х9 For the year ended December 31, 20X8, Ajax reported $98,000 of income from its separate operations (excluding income from intercorporate investments), Beta reported net income of $54,500, and Cole reported net income of $21,000.

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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Ajax Corporation purchased at book value 70 percent of Beta Corporation's ownership and 90 percent of Cole Corporation's ownership in 20X5. At the dates the ownership was acquired, the fair value of the noncontrolling interest was equal to a proportionate share of book value. There are frequent intercompany transfers among the companies. Activity relevant to 20X8 follows: Year Producer 20X7 Beta Corporation Production Cost $ 24,000 Buyer 20X7 Cole Corporation 60,000 Ajax Corporation Beta Corporation 20X8 20X8 20X8 Ajax Corporation 15,000 Beta Corporation Beta Corporation Cole Corporation 63,000 27,000 Cole Corporation Ajax Corporation Transfer Price $ 30,000 Unsold at End of Year Year Sold $ 10,000 20X8 72,000 18,000 20X8 35,000 7,000 20X9 72,000 12,000 20X9 45,000 15,000 20X9 For the year ended December 31, 20X8, Ajax reported $80,000 of income from its separate operations (excluding income from intercorporate investments), Beta reported net income of $37,500, and Cole reported net…
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