Homework Help is Here – Start Your Trial Now!
Business
Accounting
On January 1, 2024, 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, 2022, Percy, Incorporated, 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 2023, Sledge sold inventory costing $9,000 to Percy for $15,000. Of this merchandise, Percy continued to hold $5,000 at year-end. During 2024, Sledge transferred inventory costing $11,000 to Percy for $20,000. Percy still held half of these items at year-end. On January 1, 2023, Percy sold equipment to Sledge for $12,000. This asset originally cost $16,000 but had a January 1, 2023, 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. Required: 1. Prepare worksheet entries to consolidate these two companies as of December 31, 2024. 2. Compute the net income attributable to the noncontrolling interest for 2024.

On January 1, 2024, 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, 2022, Percy, Incorporated, 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 2023, Sledge sold inventory costing $9,000 to Percy for $15,000. Of this merchandise, Percy continued to hold $5,000 at year-end. During 2024, Sledge transferred inventory costing $11,000 to Percy for $20,000. Percy still held half of these items at year-end. On January 1, 2023, Percy sold equipment to Sledge for $12,000. This asset originally cost $16,000 but had a January 1, 2023, 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. Required: 1. Prepare worksheet entries to consolidate these two companies as of December 31, 2024. 2. Compute the net income attributable to the noncontrolling interest for 2024.

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
See similar textbooks
icon
Related questions
Question
On January 1, 2024, 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, 2022, Percy, Incorporated, 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 2023, Sledge sold inventory costing $9,000 to Percy for $15,000. Of this merchandise, Percy continued to hold $5,000 at year-end. During 2024, Sledge transferred inventory costing $11,000 to Percy for $20,000. Percy still held half of these items at year-end. On January 1, 2023, Percy sold equipment to Sledge for $12,000. This asset originally cost $16,000 but had a January 1, 2023, 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. Required: 1. Prepare worksheet entries to consolidate these two companies as of December 31, 2024. 2. Compute the net income attributable to the noncontrolling interest for 2024.
Transcribed Image Text:On January 1, 2024, 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, 2022, Percy, Incorporated, 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 2023, Sledge sold inventory costing $9,000 to Percy for $15,000. Of this merchandise, Percy continued to hold $5,000 at year-end. During 2024, Sledge transferred inventory costing $11,000 to Percy for $20,000. Percy still held half of these items at year-end. On January 1, 2023, Percy sold equipment to Sledge for $12,000. This asset originally cost $16,000 but had a January 1, 2023, 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. Required: 1. Prepare worksheet entries to consolidate these two companies as of December 31, 2024. 2. Compute the net income attributable to the noncontrolling interest for 2024.
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS