Alford Company and its 80 percent-owned subsidiary. Knight, have the following income statements for 2021: Alford $ (500,000) 300,000 40,000 Knight $ (230,000) 140,000 10,000 20,000 20,000 Revenues Cost of goods sold Depreciation and amortization Other expenses Gain on sale of equipment. Equity in earnings of Knight Net income (30,000) (36,200) $ (206,200) e 0 $ (60,000) Additional Information for 2021 • Intra-entity inventory transfers during the year amounted to $90,000. All intra-entity transfers were downstream from Alford to Knight. • Intra-entity gross profits in inventory at January 1 were $6,000, but at December 31, they are $9,000. . Annual excess amortization expense resulting from the acquisition is $11,000. . Knight paid dividends totaling $20,000. • The noncontrolling interest's share of the subsidiary's income is $9,800. . During the year, consolidated inventory rose by $11,000 while accounts receivable and accounts payable declined by $8,000 and $6,000, respectively.

Alford Company and its 80 percent-owned subsidiary. Knight, have the following income statements for 2021: Alford $ (500,000) 300,000 40,000 Knight $ (230,000) 140,000 10,000 20,000 20,000 Revenues Cost of goods sold Depreciation and amortization Other expenses Gain on sale of equipment. Equity in earnings of Knight Net income (30,000) (36,200) $ (206,200) e 0 $ (60,000) Additional Information for 2021 • Intra-entity inventory transfers during the year amounted to $90,000. All intra-entity transfers were downstream from Alford to Knight. • Intra-entity gross profits in inventory at January 1 were $6,000, but at December 31, they are $9,000. . Annual excess amortization expense resulting from the acquisition is $11,000. . Knight paid dividends totaling $20,000. • The noncontrolling interest's share of the subsidiary's income is $9,800. . During the year, consolidated inventory rose by $11,000 while accounts receivable and accounts payable declined by $8,000 and $6,000, respectively.

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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3
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