Scarlet Company owns 80% of Tamara Corp.’s common stock. During October 2019 Tamara sold merchandise to Scarlet for 125,000. At December 31, 2019, one-half of the merchandise remained in Scarlet inventory. For 2019, gross profit percentages were 30% for Scarlet and 40% for Tamara. The amount of unrealized intercompany profit in ending inventory at December 31, 2019 that should be eliminated in consolidation is: a. 25,000 b. 50,000 c. 20,000

Scarlet Company owns 80% of Tamara Corp.’s common stock. During October 2019 Tamara sold merchandise to Scarlet for 125,000. At December 31, 2019, one-half of the merchandise remained in Scarlet inventory. For 2019, gross profit percentages were 30% for Scarlet and 40% for Tamara. The amount of unrealized intercompany profit in ending inventory at December 31, 2019 that should be eliminated in consolidation is: a. 25,000 b. 50,000 c. 20,000

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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Scarlet Company owns 80% of Tamara Corp.'s common stock. During October 2019 Tamara sold merchandise to Scarlet for 125,000. At December 31, 2019, one-half of the merchandise remained in Scarlet inventory. For 2019, gross profit percentages were 30% for Scarlet and 40% for Tamara. The amount of unrealized intercompany profit in ending inventory at December 31, 2019 that should be eliminated in consolidation is: O 20,000 O 18,750 O 25,000 O 50,000
Let Company owns 80% of Tam Corp.’s common stock. During October 2019 Tam sold merchandise to Let for 125,000. At December 31, 2019, one-half of the merchandise remained in Let inventory. For 2019, gross profit percentages were 30% for Let and 40% for Tam. The amount of unrealized intercompany profit in ending inventory at December 31, 2019 that should be eliminated in consolidation is: a.) 50,000 b.) 20,000 c.) 18,750 d.) 25,000
Question: ClipRite sold ProForm inventory costing $72,000 during the last six months of 2020 for $120,000. At year-end, 30 percent remained ClipRite sold ProForm inventory costing $200,000 during 2021. At yearend, 1 percent is left. What are the consolidated balances? Proform acquired 70 percent of ClipRite on June 30, 2020, for $910,00 in cash. Based on ClipRites acquistion-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $10,000 per year. No goodwill was recognized in the acuisition. The noncontrolling interest fair value was assessed at $390,000 at the acquisition date. The 2021 financial statements are as follows: Proform ClipRite Sales -800,000 -600,000 Costs of goods sold 535,000 400,000 Operating expenses 100,000 100,000 Dividend Income -35,000 Net Income -200,000 -100,000 Retained earning, 1/1/21 -1,300,000 -850,000 Net Income -200,000 -100,000 Dividend declared 100,000…
Pint Co. owns 90% of the outstanding shares of Glass Inc. During 2022, Pint sold merchandise costing $100,000 to Glass for $200,000. On December 31, 2022, 25% of this merchandise remains in Sub's inventory. Assuming a 40% tax rate, how much unrealized profit should be eliminated from ending inventory in the consolidation process on December 31, 2022? Multiple Choice a. $25,000 b. $30,000 c. $50,000 d. $40,000
What are the consolidated balances for? Cost of Goods Sold Net income attributable to non controlling Interest Information: ClipRite sold ProForm inventory costing $72,000 during the last six months of 2020 for $120,000. At year-end, 30 percent remained ClipRite sold ProForm inventory costing $200,000 during 2021 for 250,000. At yearend, 10% percent is left. Proform acquired 70 percent of ClipRite on June 30, 2020, for $910,00 in cash. Based on ClipRites acquistion-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $10,000 per year. No goodwill was recognized in the acuisition. The noncontrolling interest fair value was assessed at $390,000 at the acquisition date. The 2021 financial statements are as follows: Proform ClipRite Sales -800,000 -600,000 Costs of goods sold 535,000 400,000 Operating expenses 100,000 100,000 Dividend Income -35,000 Net Income -200,000 -100,000 Retained…
During 2020, Blue Company purchased inventory costing $80,000 and sold the inventory to its wholly-owned subsidiary, Red, for $100,000 before December 31, 2020. The following elimination entry in consolidation was made for profit deferred on intercompany inventory events: Sales 100,000 Cost of goods 80,000 Inventory 20,000 During 2021 all of the profit deferred on this intercompany inventory sale in 2020 was recognized when the inventory was sold to third parties for $120,000. What elimination entry is needed in consolidation in 2021?
Anderson Company, a 90% owned subsidiary of Philbin Corporation, transfers inventory to Philbin at a 25% gross profit rate. The following data are available pertaining specifically to Philbin's intra-entity purchases from Anderson. Anderson was acquired on january 1, 2020. 2020 2021 2022 Purchases by Philbin Ending inventory on Philbin's books 1,200 4,000 $ ৪,000 5 12,000 $15.000 3,000 Assume the equity method is used. The following data are available pertaining to Anderson's income and dividends. 2020 2021 2022 $ 70,000 $ 85,000 $ 94,000 Dividends paid by Anderson 10,000 10,000 15,000 Anderson's net income Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, compute the net income attributable to the noncontrolling interest of Anderson for 2022. O $9,400. $9,375. $9,425. $8,485. $9,325.
During 2019, Parent Company sold goods costing $ 21,000 to its subsidiary, Synergy, at a gross profit of 30%. Synergy had none of this inventory on hand at the end of 2019. What is the value of Sales? Select one: O a. 26,000 O b. 25,000 O c. 26,250 O d. 30,000
Parent Co. owns 80% of Subsidiary Co. During 2021, Parent Co. sold goods with a 40% gross profit to Subsidiary Co. Subsidiary Co. sold all these goods in 2021. For 2021, consolidated financial statements, how should the summation of Parent Co. and Subsidiary Co.'s Income statement be adjusted? A. No adjustment is necessary. B. Sales and cost of goods sold should be reduced by 80% of the intercompany sales. C. Net income should be reduced by 80% of the gross profit on the intercompany sales. D. Sales and cost of goods sold should be reduced by the intercompany sales.
On January 3, 2019 Abracada acquired 90% of Deli Co. at book value. The following information is available: 2020 2019 Ending inventory 60,000 40,000 Intercompany Cost of Goods sold 120,000 120,000 Downstream sale 240,000 200,000 Net income - Deli Co. 450,000 400,000 Net income - Abracada Co. 1,100,000 1,000,000 What is the profit attributable to equity holders of parent or Controlling Interest in Net Income for 2020?
Jellicent Corporation is an 80% owned subsidiary of Frilish Corporation. During 2018, Jellicent sold merchandise that cost P120,000 to Frilish for P160,000. Frilish’s ending inventory at December 31, 2018 contained unrealized profit of P8,000 from the intercompany sales.During 2019, Jellicent sold merchandise that cost P140,000 to Frilish for P190,000. One-half of this remained unsold by Frilish at December 31, 2019. For 2019, Frilish’s separate income (does not include investment income) was P250,000 and Jellicent 's reported net income was P190,000. The consolidated net income attributable to parent for 2019 will be: *a. P356,000b. P388,400c. P342,500d. P377,500
Anderson Company, a 90% owned subsidiary of Philbin Corporation, transfers inventory to Philbin at a 25% gross profit rate. The following data are available pertaining specifically to Philbin’s intra-entity purchases from Anderson. Anderson was acquired on January 1, 2020. 2020 2021 2022 Purchases by Philbin $ 8,000 $ 12,000 $ 15,000 Ending inventory on Philbin’s books 1,200 4,000 3,000 Assume the equity method is used. The following data are available pertaining to Anderson’s income and dividends. 2020 2021 2022 Anderson’s net income $ 70,000 $ 85,000 $ 94,000 Dividends paid by Anderson 10,000 10,000 15,000 For consolidation purposes, what amount would be debited to January 1 retained earnings for the 2022 consolidation worksheet entry with regard to the unrecognized intra-entity gross profit remaining in ending inventory with respect to the 2021 intra-entity transfer of merchandise? Multiple Choice $3,000.…