2) At December 31, 2021, The Comparative income statements of Polo Corporation and SoloCorporation show the following (in thousands):SalesIncome from SoloCost of goods soldOperating expensesPolo$3,2003841,800800Solo$1,300400400Additional information1. Polo Corporation acquired 80 percent of Solo for $1,600,000 on January 1, 2019, when Solo'sStockholders' equity at book value was $1,400,000.2. The excess of the cost Polo's investment in Solo over book value acquired was allocated$60,000 to undervalued inventories that were sold in 2019, $80,000 to undervalued equipmentwith a four-year remaining useful life, and the remainder to goodwill.Required:Prepare a consolidated income statement for Polo Corporation and Subsidiary for the year endedDecember 31, 2021.

Given in the question: StatementDecember 31, 2021 Particulars Polo Solo Sales…

Answered: Prepare a consolidated income statement…

Business

Accounting

Prepare a consolidated income statement for Polo Corporation and Subsidiary for the year ended December 31, 2021.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 2P

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Comparative income statements of Sub Corporation for the calendar years 2019, 2020, and 2021 are as follows (in thousands): 2019 2020 2021Sales $22,000 $18,500 $19,250Cost of sales 10,600 9,900 10,100Gross profit 11400 8600 9150Operating expenses 5,700 5,500 6,000Net income $ 5700 $ 3100 $ 3150ADDITIONAL INFORMATION1. Sub was an 80 percent-owned subsidiary of Pub Corporation throughout the 2019–2021 period. Pub’s separate income (excludes income from Sub) was $7,200,000, $6,600,000, and $7,500,000 in 2019, 2020, and 2021, respectively. Pub acquired its interest in Sub at its underlying book value, which was equal to fair value on July 1, 2017.2. Pub sold inventory items to Sub during 2019 at a gross profit to Pub of $720,000. Half the merchandise remained in Sub’s inventory at December 31, 2019. Total sales by Pub to Sub in 2019 were $1,800,000. The remaining merchandise was sold by Sub in 2020.3. Pub’s inventory at December 31, 2020, included items acquired from Sub on which Sub made…
Comparative income statements of Sub Corporation for the calendar years 2019, 2020, and 2021 are as follows (in thousands): 2019 2020 2021Sales $22,000 $18,500 $19,250Cost of sales 10,600 9,900 10,100Gross profit 11400 8600 9150Operating expenses 5,700 5,500 6,000Net income $ 5700 $ 3100 $ 3150ADDITIONAL INFORMATION1. Sub was an 80 percent-owned subsidiary of Pub Corporation throughout the 2019–2021 period. Pub’s separate income (excludes income from Sub) was $7,200,000, $6,600,000, and $7,500,000 in 2019, 2020, and 2021, respectively. Pub acquired its interest in Sub at its underlying book value, which was equal to fair value on July 1, 2017.2. Pub sold inventory items to Sub during 2019 at a gross profit to Pub of $720,000. Half the merchandise remained in Sub’s inventory at December 31, 2019. Total sales by Pub to Sub in 2019 were $1,800,000. The remaining merchandise was sold by Sub in 2020.3. Pub’s inventory at December 31, 2020, included items acquired from Sub on…
Jack Co. acquired an 80% interest in Gill Co at book value on January 1, 2018. Intercompany purchases and sales and inventory data for 2018, 2019, 2020, and 2021 are as follows: Sale by Gill Co Intercompany Profit in Jack's Inventory at Dec 31 2018 $250,00 $20,000 2019 150,000 12,000 2020 310,000 25,000 Selected data from the financial statements of Jack and Gill at and for the year ended December 31, 2020, are as follows: Jack Gill Income Statement Sales 900,000 600,000 Cost of sales 625,000 300,000 Expenses 225,000…
How much is the consolidated profit in 2021? A. 310,000B. 320,000C. 301,000D. 336,000
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