During the next two years, Nolan reported the following: Dividends Declared Inventory Transfers to James at Transfer Price Income 2017 2018 $78,000 $25,000 $190,000 85.000 27,000 210,000 Nolan sells inventory to James after a markup based on a gross profit rate. At the end of 2017 a 2018, 30 percent of the current year purchases remain in James's inventory.
On January 1, 2017, James Company purchased 100 percent of the outstanding voting stock of Nolan, Inc., for $1,000,000 in cash and other consideration. At the purchase date, Nolan had common stock of $500,000 and
Required
Create an Excel spreadsheet that computes the following:
1. Equity method balance in James' Investment in Nolan, Inc., account as of December 31, 2018.
2. Worksheet adjustments for the December 31, 2018, consolidation of James and Nolan.
Formulate your solution so that Nolan's gross profit rate on sales to James is treated as a variable.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
