1. Compute for the consolidated gross profit. 2. Compute for the consolidated net income attributable to Parent. FIFTH PROBLEMOn January 2, 2012, Power Company acquired 90% of the outstanding shares of Solar Inc. at book value.During 2012 and 2013, intercompany sales amounted to P2,000,000 and P4,000,000, respectively.Power Company consistently recognized a 25% mark-up based on cost while Solar Inc. had a 25% grossprofit on sales. The inventories of the buying affiliate, which all came from inter-company transactionsshow.December 31, 2012December 31, 2013PowerP240,000P160,000Solar100,00040,000On October 1. 2012, Solar Inc., purchased a piece of land costing P1,000,000 from Power Company forP1,500,000. On December 1, 2013, Solar Inc., sold this land to unrelated party for P1,500,000. On theother hand, on July 1, 2013, Solar Inc., sold a used photo-copier with a carrying value of P60,000 andremaining life of 3 years to Power Company for P42,000.Separate Statement of Comprehensiv income for the two compenies for the year 2013 foliow:Power CompanySolar Inc.SalesP25,000,000P14,000,000Cost of Sales(8,400,000)P 5,600,000(15,000,000)Gross ProfitP10,000,000Operating ExpensesOperating ProfitLoss on Sale of Office Equipment16,000,000)13,800,000)P1,800,000( 18,000)P 4,000,000Dividend Revenue40,000Net IncomeP4,C00,0000P 1,822,000

Given data on 02.01.2012 Power company acquired outstanding shares of solar inc 90% Power company…

Answered: FIFTH PROBLEM On January 2, 2012, Power…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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PROBLEM ON INTERCOMPANY TRANSACTIONS On January 2, 2008, BMO acquired 90% of the outstanding shares of MARCELINE Co. at book value. During 2008 and 2009, intercompany sales amounted to $2,000,000 and 4,000,000, respectively. MARCELINE Co. consistently recognized 25% mark-up based on sales while BMO had a 25% gross profit on cost. The inventories of the buying affiliate, which all came from inter-company transactions are as follows: December 31, 2008 December 31, 2009 BMO $240,000 $160,000 MARCELINE $100,000 $40,000 On October 1, 2008, BMO purchased a piece of land costing $1,000,000 from MARCELINE for $1,500,000. On December 31, 2009, BMO sold this land to an unrelated party for $1,500,000. On the other hand, on July 1, 2009, BMO sold a used machine with a carrying value of $60,000 and remaining life of 3 years to MARCELINE CO. for $42,000. Below are the Statement of Comprehensive Income for the two companies in 2009. BMO CO. MARCELINE CO. Sales $14,040,000…
PROBLEM ABOUT INTERCOMPANY TRANSACTIONS On January 2, 2004, KRABBY PATTY acquired 90% of the outstanding shares of CORAL BITS Co. at book value. During 2004 and 2005, intercompany sales amounted to $200,000 and 400,000, respectively. CORAL BITS Co. consistently recognized 25% mark-up based on sales while KRABBY PATTY had a 25% gross profit on cost. The inventories of the buying affiliate, which all came from inter-company transactions are as follows: Year Ended 2004 Year Ended 2005 KRABBY PATTY $24,000 $16,000 CORAL BITS $10,000 $4,000 On October 1, 2004, KRABBY PATTY purchased a piece of land costing $100,000 from CORAL BITS for $150,000. On December 31, 2005, KRABBY PATTY sold this land to an unrelated party for $150,000. On the other hand, on July 1, 2005, KRABBY PATTY sold a used machine with a carrying value of $6,000 and remaining life of 3 years to CORAL BITS CO. for $4,200. Below are the Statement of Comprehensive Income for the two companies in 2005.…
P Company owns 70% of S Company’s common stocks acquired on January 1, 2016. S regularly sells merchandise to P at 150% of its cost. P’s December 31, 2016 and 2017 inventories include goods purchased inter-company of P450,000 and P132,000, respectively. The separate incomes of the affiliates are summarized as follows: (Year 2017) P S Sales 4,800,000 3,200,000 Cost of Sales (2,400,000) (2,000,000) Operating Expenses (1,600,000) (400,000) Separate Incomes 800,000 800,000 What is the consolidated net income attributable to minority interest for 2017?
Weisman Company, a 100% owned subsidiary of Martindale Corporation, sells inventory to Martindale at a 20% profit on selling price. The following data are available pertaining to inter-company purchases by Martindale: 4. 5. a. b. Weisman's profit numbers were $125,000, $142,000 and $265,000 for 2020, 2021, and 2022, respectively. Martindale received dividends from Weisman of $25,000 for 2020 and 2021, and $30,000 for 2022. C. d. 3. Assume Weisman uses the equity method to account for its investment in Martindale. What is the balance in the pre-consolidation Income (loss) from subsidiary account for 2021? $136,000 a. b. Inter-company sales $18,000 $19,400 $21,500 C. d. 2020: 2021: 2022: a. b. C. d. $140,800 $141,600 $142,800 Assume Weisman uses the equity method to account for its investment in Martindale. What is the balance in pre-consolidation Income (loss) from subsidiary for 2022? Unsold at year end (based on selling price) 2020: 2021: 2022: $235,000 $264,600 $265,400 $268,600…
2. Martindale Company, a 100% owned subsidiary of Weisman Corporation, sells inventory to Weisman at a 20% profit on selling price. The following data are available pertaining to inter-company purchases by Weisman: Inter-company sales: Unsold at year end (based on selling price): 2020: $18,000 2020: $4,000 2021: $19,400 2021: $6,000 2022: $21,500 2022: $8,000 Martindale's profit numbers were $125,000, $142,000 and $265,000 for 2020, 2021, and 2022, respectively. Weisman received dividends from Martindale of $25,000 for 2020 and 2021, and $30,000 for 2022. Assume Weisman uses the equity method to account for its investment in Martindale. What is the balance in pre-consolidation Income (loss) from subsidiary for 2022? Select one: A. $268,600 B. $235,000 C. $265,400 D. $264,600
Sun Corporation, a 75 percent–owned subsidiary of Pam Corporation, sells inventory items to its parent at 125 percent of cost. Inventories of the two affiliates for 2016 are as follows: Pam Sun Beginning inventory $400,000 $250,000 Ending inventory 500,000 200,000 Pam’s beginning and ending inventories include merchandise acquired from Sun of $150,000 and $200,000, respectively, which is sold in the following year. If Sun reports net income of $300,000 for 2016, Pam’s income from Sun will be: $255,000 $217,500 $215,000 $195,000
On 1 July 2015, Ausra purchased 75% of Danute by way of a share exchange oftwo new shares in Ausra for every three purchasedin Danute . Ausra's share price at the acquisition date was $4.70.] + Statement of Comprehensive Income for the year ended 31 December 2015 Ausra$ 000 120,000 Danute$ 000 Revernie 48,000 Cost of sales (84,000) (40,000) Gross profit Operating expenses Profit from operations 36,000 8,000 (11,900) (400) 7,600 24,100 Other income 300 Finance costs (1,200) Profit before tax 24,400 6,400 Income tax expense (6,000) 18,400 (1,200) 5,200 Profit for the year The following information is relevant 1JThe fair value of Danute's net assets differed from its carrying values at 1 July 2015. Plant was $8 million m excess of its net book value. Plant had 4 years remaiming at the date of acquisition. The group depreciation policy is to charge depreciation on a proportionate basis and should be included in cost of sales. No adjustment was made for this in Danute s fmancial statements.…
Please help me to solve this problem
Sorel is an 80%-owned subsidiary of Pattern Company. The two affiliates had the following separate income statements for 2015 and 2016. (attached)Sorel sells at the same gross profit percentage to all customers. During 2015, Sorel sold goods to Pattern for the first time in the amount of $120,000. $30,000 of these sales remained in Pattern’s ending inventory. During 2016, sales to Pattern by Sorel were $150,000, of which $25,000 sales were still in Pattern’s December 31, 2016, inventory.Prepare consolidated income statements including the distribution of income to the controlling and noncontrolling interests for 2015 and 2016.
3
Up and its 80 percent–owned subsidiary (Down) reported the following figures for the year ending December 31, 2018. Down paid dividends of $30,000 during this period. UP DOWN Sales $(600000) $(300000) Cost of goods sold 300000 140000 Operating expenses 174000 60000 Dividend Income (24000) -0- Net income $(150000) $(100000) In 2017, intra-entity gross profits of $30,000 on upstream transfers of $90,000 were deferred into 2018. In 2018, intra-entity gross profits of $40,000 on upstream transfers of $110,000 were deferred into 2019.a. What amounts appear for each line in a consolidated income statement? Explain your computations.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 30 percent.
What amount of sales will be reported in the 2012 consolidated income statement? What amount of cost of goods sold will be reported in the 2012 consolidated income statement?

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