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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 Debit Spark Filter Company Credit $ 103,000 Plug Products Credit Debit $ 155,000 225,000 123,000 270,000 182,000 257,186 175,000 45,000 140,000 35,000 $ 154,910 $ 74,310 186,000 80,000 462,000 202,000 276,690 226,690 47,586 $ 1,127,186 $ 1,127,186 $ 583,000 $ 583,000 On January 1, 20X8, Plug's inventory contained filters purchased for $78,000 from Spark Filter, which had produced the filters for $58,000. In 20X8, Spark Filter spent $118,000 to produce additional filters, which it sold to Plug for $158,690. By December 31, 20X8, Plug had sold all filters that had been on hand January 1, 20X8, but continued to hold in inventory $47,607 of the 20X8 purchase from Spark Filter. 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. 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

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 Debit Spark Filter Company Credit $ 103,000 Plug Products Credit Debit $ 155,000 225,000 123,000 270,000 182,000 257,186 175,000 45,000 140,000 35,000 $ 154,910 $ 74,310 186,000 80,000 462,000 202,000 276,690 226,690 47,586 $ 1,127,186 $ 1,127,186 $ 583,000 $ 583,000 On January 1, 20X8, Plug's inventory contained filters purchased for $78,000 from Spark Filter, which had produced the filters for $58,000. In 20X8, Spark Filter spent $118,000 to produce additional filters, which it sold to Plug for $158,690. By December 31, 20X8, Plug had sold all filters that had been on hand January 1, 20X8, but continued to hold in inventory $47,607 of the 20X8 purchase from Spark Filter. 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. 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

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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Income assigned to the controlling interest is $104,276

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 Debit Spark Filter Company Credit $ 103,000 Plug Products Credit Debit $ 155,000 225,000 123,000 270,000 182,000 257,186 175,000 45,000 140,000 35,000 $ 154,910 $ 74,310 186,000 80,000 462,000 202,000 276,690 226,690 47,586 $ 1,127,186 $ 1,127,186 $ 583,000 $ 583,000 On January 1, 20X8, Plug's inventory contained filters purchased for $78,000 from Spark Filter, which had produced the filters for $58,000. In 20X8, Spark Filter spent $118,000 to produce additional filters, which it sold to Plug for $158,690. By December 31, 20X8, Plug had sold all filters that had been on hand January 1, 20X8, but continued to hold in inventory $47,607 of the 20X8 purchase from Spark Filter. 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.
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 Debit Spark Filter Company Credit $ 103,000 Plug Products Credit Debit $ 155,000 225,000 123,000 270,000 182,000 257,186 175,000 45,000 140,000 35,000 $ 154,910 $ 74,310 186,000 80,000 462,000 202,000 276,690 226,690 47,586 $ 1,127,186 $ 1,127,186 $ 583,000 $ 583,000 On January 1, 20X8, Plug's inventory contained filters purchased for $78,000 from Spark Filter, which had produced the filters for $58,000. In 20X8, Spark Filter spent $118,000 to produce additional filters, which it sold to Plug for $158,690. By December 31, 20X8, Plug had sold all filters that had been on hand January 1, 20X8, but continued to hold in inventory $47,607 of the 20X8 purchase from Spark Filter. 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.
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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