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Plug Products owns 80 percent of the stock of Spark Filter Company, which it acquired at underlying book value on August 30, 20X6. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Spark Filter. Summarized trial balance data for the two companies as of December 31, 20X8, are as follows: Plug Products Cash and Accounts Receivable Inventory Buildings and Equipment (net) Investment in Spark Filter Company Cost of Goods Sold Depreciation Expense Current Liabilities Common Stock Retained Earnings Sales Income from Spark Filter Company Total Debit $ 145,000 220,000 270,000 268,000 175,000 30,000 Credit $ 150,000 200,000 472,000 250,000 36,000 $ 1,108,000 Spark Filter Company Debit $ 90,000 Credit 110,000 180,000 140,000 20,000 $ 540,000 $ 30,000 90,000 220,000 200,000 $ 540,000 $ 1,108,000 On January 1, 20X8, Plug's inventory contained filters purchased for $60,000 from Spark Filter, which had produced the filters for $40,000. In 20x8, Spark Filter spent $100,000 to produce additional filters, which it sold to Plug for $150,000. By December 31, 20x8, Plug had sold all filters that had been on hand January 1, 20X8, but continued to hold in inventory $45,000 of the 20X8 purchase from Spark Filter.

Plug Products owns 80 percent of the stock of Spark Filter Company, which it acquired at underlying book value on August 30, 20X6. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Spark Filter. Summarized trial balance data for the two companies as of December 31, 20X8, are as follows: Plug Products Cash and Accounts Receivable Inventory Buildings and Equipment (net) Investment in Spark Filter Company Cost of Goods Sold Depreciation Expense Current Liabilities Common Stock Retained Earnings Sales Income from Spark Filter Company Total Debit $ 145,000 220,000 270,000 268,000 175,000 30,000 Credit $ 150,000 200,000 472,000 250,000 36,000 $ 1,108,000 Spark Filter Company Debit $ 90,000 Credit 110,000 180,000 140,000 20,000 $ 540,000 $ 30,000 90,000 220,000 200,000 $ 540,000 $ 1,108,000 On January 1, 20X8, Plug's inventory contained filters purchased for $60,000 from Spark Filter, which had produced the filters for $40,000. In 20x8, Spark Filter spent $100,000 to produce additional filters, which it sold to Plug for $150,000. By December 31, 20x8, Plug had sold all filters that had been on hand January 1, 20X8, but continued to hold in inventory $45,000 of the 20X8 purchase from Spark Filter.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Plug Products owns 80 percent of the stock of Spark Filter Company, which it acquired at underlying book value on August 30, 20X6. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Spark Filter. Summarized trial balance data for the two companies as of December 31, 20X8, are as follows: Cash and Accounts Receivable Inventory Buildings and Equipment (net) Investment in Spark Filter Company Cost of Goods Sold Depreciation Expense Current Liabilities Common Stock Retained Earnings Sales Income from Spark Filter Company Total view transaction list Consolidation Worksheet Entries Plug Products < Debit $ 145,000 220,000 270,000 268,000 175,000 30,000 A B C $ 1,108,000 Credit $ 150,000 200,000 472,000 250,000 36,000 $ 1,108,000 Spark Filter Company Debit Credit $ 90,000 110,000 180,000 140,000 20,000 On January 1, 20X8, Plug's inventory contained filters purchased for $60,000 from Spark Filter, which had produced the filters for $40,000. In 20X8, Spark Filter spent $100,000 to produce additional filters, which it sold to Plug for $150,000. By December 31, 20X8, Plug had sold all filters that had been on hand January 1, 20X8, but continued to hold in inventory $45,000 of the 20X8 purchase from Spark Filter. $ 540,000 Required: a. Prepare all consolidation entries needed to complete a consolidation worksheet for 20X8. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. $ 30,000 90,000 220,000 200,000 $ 540,000
Transcribed Image Text:Plug Products owns 80 percent of the stock of Spark Filter Company, which it acquired at underlying book value on August 30, 20X6. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Spark Filter. Summarized trial balance data for the two companies as of December 31, 20X8, are as follows: Cash and Accounts Receivable Inventory Buildings and Equipment (net) Investment in Spark Filter Company Cost of Goods Sold Depreciation Expense Current Liabilities Common Stock Retained Earnings Sales Income from Spark Filter Company Total view transaction list Consolidation Worksheet Entries Plug Products < Debit $ 145,000 220,000 270,000 268,000 175,000 30,000 A B C $ 1,108,000 Credit $ 150,000 200,000 472,000 250,000 36,000 $ 1,108,000 Spark Filter Company Debit Credit $ 90,000 110,000 180,000 140,000 20,000 On January 1, 20X8, Plug's inventory contained filters purchased for $60,000 from Spark Filter, which had produced the filters for $40,000. In 20X8, Spark Filter spent $100,000 to produce additional filters, which it sold to Plug for $150,000. By December 31, 20X8, Plug had sold all filters that had been on hand January 1, 20X8, but continued to hold in inventory $45,000 of the 20X8 purchase from Spark Filter. $ 540,000 Required: a. Prepare all consolidation entries needed to complete a consolidation worksheet for 20X8. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. $ 30,000 90,000 220,000 200,000 $ 540,000
b. Compute consolidated net income and income assigned to the controlling interest in the 20X8 consolidated income statement. Consolidated net income Income assigned to the controlling interest c. Compute the balance assigned to the noncontrolling interest in the consolidated balance sheet as of December 31, 20X8. Noncontrolling interest
Transcribed Image Text:b. Compute consolidated net income and income assigned to the controlling interest in the 20X8 consolidated income statement. Consolidated net income Income assigned to the controlling interest c. Compute the balance assigned to the noncontrolling interest in the consolidated balance sheet as of December 31, 20X8. Noncontrolling interest
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