Pam Corporation owns 70 percent of Sun Company’s common stock, acquired January 1, 2017. Patents from the investment are being amortized at a rate of $20,000 per year. Sun regularly sells merchandise to Pam at 150 percent of Sun’s cost. Pam’s December 31, 2017, and 2018 inventories include goods purchased intercompany of $112,500 and $33,000, respectively. The separate incomes (do not include investment income) of Pam and Sun for 2018 are summarized as follows: Pam Sun Sales Cost of Sales Other expenses
Pam Corporation owns 70 percent of Sun Company’s common stock, acquired January 1, 2017.
Patents from the investment are being amortized at a rate of $20,000 per year. Sun regularly sells
merchandise to Pam at 150 percent of Sun’s cost. Pam’s December 31, 2017, and 2018 inventories
include goods purchased intercompany of $112,500 and $33,000, respectively. The separate incomes
(do not include investment income) of Pam and Sun for 2018 are summarized as follows:
Pam Sun
Sales
Cost of Sales
Other expenses
$1,200,000
(600,000)
(400,000)
$800,000
(500,000)
(100,000)
Separate incomes $200,000 $200,000
Required:
What is the consolidated income should be allocated to controlling and noncontrolling interest
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