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Sorel Company Pattern Company 2015 2016 2015 2016 Sales revenue $250,000 $350,000 $500,000 $540,000 Cost of goods sold. Gross profit .. Expenses .. 310,000 $100,000 $140,000 $190,000 150,000 210,000 360,000 $180,000 125,000 $ 55,000 45,000 66,000 $ 74,000 120,000 Net income $ 55,000 $ 70,000

Sorel Company Pattern Company 2015 2016 2015 2016 Sales revenue $250,000 $350,000 $500,000 $540,000 Cost of goods sold. Gross profit .. Expenses .. 310,000 $100,000 $140,000 $190,000 150,000 210,000 360,000 $180,000 125,000 $ 55,000 45,000 66,000 $ 74,000 120,000 Net income $ 55,000 $ 70,000

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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Sorel is an 80%-owned subsidiary of Pattern Company. The two affiliates had the following separate income statements for 2015 and 2016. (attached)

Sorel sells at the same gross profit percentage to all customers. During 2015, Sorel sold goods to Pattern for the first time in the amount of $120,000. $30,000 of these sales remained in Pattern’s ending inventory. During 2016, sales to Pattern by Sorel were $150,000, of which $25,000 sales were still in Pattern’s December 31, 2016, inventory.
Prepare consolidated income statements including the distribution of income to the controlling and noncontrolling interests for 2015 and 2016.

Sorel Company Pattern Company 2015 2016 2015 2016 Sales revenue $250,000 $350,000 $500,000 $540,000 Cost of goods sold. Gross profit .. Expenses .. 310,000 $100,000 $140,000 $190,000 150,000 210,000 360,000 $180,000 125,000 $ 55,000 45,000 66,000 $ 74,000 120,000 Net income $ 55,000 $ 70,000
Transcribed Image Text:Sorel Company Pattern Company 2015 2016 2015 2016 Sales revenue $250,000 $350,000 $500,000 $540,000 Cost of goods sold. Gross profit .. Expenses .. 310,000 $100,000 $140,000 $190,000 150,000 210,000 360,000 $180,000 125,000 $ 55,000 45,000 66,000 $ 74,000 120,000 Net income $ 55,000 $ 70,000
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