On January 1, 2021, Sledge had common stock of $120,000 and retained earnings of $260,000. During that year, Sledge reported sales of $130,000, cost of goods sold of $70,000, and operating expenses of $40,000. On January 1, 2019, Percy, Inc., acquired 80 percent of Sledge's outstanding voting stock. At that date, $60,000 of the acquisition-date fair value was assigned to unrecorded contracts (with a 20-year life) and $20,000 to an undervalued building (with a 10-year remaining life). In 2020, Sledge sold inventory costing $9,000 to Percy for $15,000. Of this merchandise, Percy continued to hold $5,000 at year-end. During 2021, Sledge transferred inventory costing $11,000 to Percy for $20,000. Percy still held half of these items at year-end.
I need help with required B please
On January 1, 2021, Sledge had common stock of $120,000 and
On January 1, 2019, Percy, Inc., acquired 80 percent of Sledge's outstanding voting stock. At that date, $60,000 of the acquisition-date fair value was assigned to unrecorded contracts (with a 20-year life) and $20,000 to an undervalued building (with a 10-year remaining life).
In 2020, Sledge sold inventory costing $9,000 to Percy for $15,000. Of this merchandise, Percy continued to hold $5,000 at year-end. During 2021, Sledge transferred inventory costing $11,000 to Percy for $20,000. Percy still held half of these items at year-end.
On January 1, 2020, Percy sold equipment to Sledge for $12,000. This asset originally cost $16,000 but had a January 1, 2020, book value of $9,000. At the time of transfer, the equipment's remaining life was estimated to be five years.
Percy has properly applied the equity method to the investment in Sledge.
- Prepare worksheet entries to consolidate these two companies as of December 31, 2021.
- Compute the net income attributable to the noncontrolling interest for 2021.
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