Arriba and its 80 percent-owned subsidiary (Abajo) reported the following figures for the year ending December 31, 2021 (credit balances indicated by parentheses). Abajo paid dividends of $34,000 during this period. Abajo $(340,000) 158,800 68,000 Arriba Sales Cost of goods sold Operating expenses Dividend income $(680,000) 340,000 197, 200 (27,200) $(170,000) Net income $(113,200) In 2020, intra-entity gross profits of $34,000 on upstream transfers of $102,000 were deferred into 2021. In 2021 intra-entity gross profits of $45,200 on upstream transfers of $124,400 were deferred into 2022. a. What amounts appear for each line in a consolidated income statement for the year ending December 31, 2021? b. What income tax expense should appear on the consolidated income statement if each company files a separate return? Assume that the tax rate is 21 percent.

Arriba and its 80 percent-owned subsidiary (Abajo) reported the following figures for the year ending December 31, 2021 (credit balances indicated by parentheses). Abajo paid dividends of $34,000 during this period. Abajo $(340,000) 158,800 68,000 Arriba Sales Cost of goods sold Operating expenses Dividend income $(680,000) 340,000 197, 200 (27,200) $(170,000) Net income $(113,200) In 2020, intra-entity gross profits of $34,000 on upstream transfers of $102,000 were deferred into 2021. In 2021 intra-entity gross profits of $45,200 on upstream transfers of $124,400 were deferred into 2022. a. What amounts appear for each line in a consolidated income statement for the year ending December 31, 2021? b. What income tax expense should appear on the consolidated income statement if each company files a separate return? Assume that the tax rate is 21 percent.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Comparative consolidated balance sheet data for Iverson, Inc., and its 80 percent-owned subsidiary Oakley Co. follow: Cash Accounts receivable (net) Merchandise inventory Buildings and equipment (net) Trademark Totals Accounts payable Notes payable, long-term Noncontrolling interest Common stock, $10 par Retained earnings (deficit) Totals 2014 2013 $ 9,550 $ 10,600 49,550 82,750 102,000 116,500 118,500 136,500 22,750 39,750 $43,050. $43,200. $21,600. $15,700. $362,350 $326,100 $ 92,600 $ 71,000 0 31,700 52,800 43,000 200,000 200,000 16,950 (19,600) $362,350 $ 326,100 Additional Information for Fiscal Year 2014 • Iverson and Oakley's consolidated net income was $58,750. Oakley paid $7,000 in dividends during the year. Iverson paid $11,000 in dividends. Oakley sold $18,000 worth of merchandise to Iverson during the year. There were no purchases or sales of long-term assets during the year. In the 2014 consolidated statement of cash flows for Iverson Company: Net cash flows from operating…
The most recent financial statements for GPS, Inc., are shown here: Income Statement Balance Sheet Sales $22,300 Assets $120,000 Debt $43,600 Costs 15,800 Equity 76,400 Taxable income $6,500 Total $120,000 Total $120,000 Taxes (35%) 2,275 Net income $4,225 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1,660 was paid, and the company wishes to maintain a constant payout ratio. Next year's sales are projected to be $28,900. Required: What is the external financing needed? Multiple Choice a. $27,258 b. $26,025 c. $28,492 d. $32,191 e. $210,928 Give typing answer with explanation and conclusion
WD Corporation reports the following year-end balance sheet data. The company's debt-to-equity ratio equals: Cash $ 42,000 Current liabilities $ 77,000 Accounts receivable 57,000 Long-term liabilities 28,000 Inventory 62,000 Common stock 102,000 Equipment 147,000 Retained earnings 101,000 Total assets $ 308,000 Total liabilities and equity $ 308,000
Selected accounts from the year-to-date financial statements for Nowak Company and its wholly owned subsidiary, Shawinigan Ltd., were as follows: Cash Inventory Deferred income tax asset Sales Cost of sales Income tax expense Additional Information . Nowak Shawinigan $ 570 $ 750 210 • The above statements include the only intercompany transaction this year which was a cash sale of $600 by Nowak to Shawinigan at its regular margin of 30% of sales and accrued income tax at its tax rate of 40%. Cash Inventory Deferred income tax asset 9,100 6,370 910 Sales Cost of sales Income tax expense Today, Shawinigan sold $400 of the inventory it had purchased from Nowak to an arm's length party at its regular markup of 30% over cost and accrued income tax at its tax rate of 40%. 180 1,740 90 5,200 4,000 450 Required: Determine the account balance for each account on the three financial statements after the new transaction is recorded. (Input all amounts as positive values. Omit $ sign in your…
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts. Cash Receivables Inventory Land Building and equipment (net) Franchise agreements Accounts payable Accrued expenses Longterm liabilities Common stock-$20 par value Common stock-$5 par value Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Padre Company Book Values $ 12/31 354, 750 242, 250 482, 500 Sol Company Book Values 12/31 56,700 $ 312,000 174,000 194, 000 720,000 837,500 332,000 242,000 252,000 (352,000) (152,000) (189,000) (54,500) (1,132,500) (532,500) (660, 000) (210, 000) (70,000) (90, 000) (422,500) (260, 000) Fair Values (1,000,000) (354,700) 947,000 333,000 12/31 56, 700 312, 000 229, 900 171, 200 395, 300 290, 800 (152,000) (54,500) (532, 500) Note: Parentheses indicate a credit balance. On December 31, Padre acquires Sol's outstanding stock by paying $228,000 in cash and issuing 14,500 shares of…
Meman
The income statement for Cullumber, Inc. is as follows: CULLUMBER, INC. Income Statement For the Year Ended December 31, 2021 Sales revenue $442,000 Cost of goods sold 264,000 Gross profit 178,000 Expenses (including $19,000 interest and $36,700 income taxes) 114.000 Net income $64,000 Additional information: 1 2 Common stock outstanding January 1, 2021 was 44,000 shares and 54,000 shares were outstanding at December 31, 2021. The market price of Cullumber, Inc., stock was $16 in 2021. 3. Cash dividends of $17,130 were paid, $1,770 of which were to preferred stockholders. Compute the following measures for 2021: (Round Earnings per share to 2 decimal places, eg. 52.75. Round other answers to 1 decimal place, e.g. 52.7.) (a) Earnings per share $ (b) Price-earnings ratio (c) Payout ratio (d) Times interest earned 1.31 12.2 times 26.7 % times
The most recent financial statements for Bello Company are shown here: Balance Sheet $ 4,700 Current assets $ 4,996 Debt 3,102 Fixed assets 12,230 Equity Taxable $ $1,598 Total Total income 17,226 Taxes (22%) 352 Net Income $1,246 Income Statement Sales Costs Tran 5.07% Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 32 percent dividend payout ratio. What is the internal growth rate? 5.27% 13.26% 5.17% $ 9,988 7,238 2.37% $ 17,226
The following financial information relates to Cams Limited. Statement of Financial Position as at 31 December 2020 and 2021 2021 Ordinary share capital Retained earnings Property, plant and equipment Investments Debentures 12.5% Inventory Trade debtors Prepaid expenses Trade creditors Bank overdraft SARS (income tax) Shareholders for dividends R 400 000 000 Profit before interest and tax Depreciation on equipment Dividends received on investments Interest on dividends Income tax 55 230 000 165 000 20 000 124 000 37 000 25 21 000 000 5 000 30 000 Statement of comprehensive income for the year 31 December 2021 REGENT BUSINESS SCHOOL (RBS) ACADEMIC AND ASSESSMENT CALENDAR-JANUARY 2022 Note no. 1 for the year ended 31 December 2020 and 2021 Property, plant and equipment Land and building at cost Equipment at carrying value R 295 000 5000 195 000 2021 (R) 200 000 30.000 230 000 110 000 60 000 R 2020 120 000 28 500 1500 42 500 25 000 7 500 20 000 BACHELOR OF COMMERCE IN HUMAN RESOURCE…
Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATIONIncome Statement Sales $ 42,900 Costs 33,900 Taxable income $ 9,000 Taxes (21%) 1,890 Net income $ 7,110 Dividends $ 2,509 Addition to retained earnings 4,601 The balance sheet for the Heir Jordan Corporation follows. HEIR JORDAN CORPORATIONBalance Sheet Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 2,250 Accounts payable $ 4,000 Accounts receivable 5,100 Notes payable 8,000 Inventory 8,000 Total $ 12,000 Total $ 15,350 Long-term debt $ 22,000 Owners’ equity Fixed assets Common stock and…
Orem Corporation's current liabilities are $191,880, its long-term liabilities are $1,356, 420, and its working capital is $268, 600. If the corporation's debt-to - equity ratio is 0.39, total long-term assets must equal: Multiple Choice $5, 249, 700 $5,057, 820 $4, 565, 820 $3,970, 000
SLM, Inc., with sales of $800, has the following balance sheet: SLM, Incorporated Balance Sheet as of 12/31/X0 Assets Liabilities and Equity Accounts receivable $ 200 Trade accounts payable $ 120 Inventory 360 Long-term debt 510 Plant 800 Equity 730 $ 1,360 $ 1,360 It earns 9 percent on sales (after taxes) and pays no dividends. Round your answers to the nearest dollar. Determine the balance sheet entries for sales of $1,400 using the percent of sales method of forecasting. Accounts receivable: $ Inventory: $ Trade accounts payable: $ Will the firm need external financing to grow to sales of $1,400? If Yes, calculate the amount of external funding required, if No, enter zero. , the amount of the external funds needed is $ . Construct the new balance sheet and use newly issued long-term debt to cover a financial deficiency, if any. SLM, Incorporated Balance Sheet as of 12/31/X1 Assets Liabilities and Equity Accounts…