Summer Company sells all its output at 25 percent above cost. Parade Corporation purchases all its inventory from Summer. Selected information on the operations of the companies over the past three years is as follows: Summer Company Year 20X2 20X3 20X4 $ 202,000 177,000 285,000 Net Income $ 104,000 94,000 164,000 Inventory, December 31 $ 70,700 106, 200 152,000 Parade acquired 70 percent of the ownership of Summer on January 1, 20X1, at underlying book value. Required: Compute consolidated net income and income assigned to the controlling interest for 20X2, 20X3, and 20X4. Parade Corporation Sales to Parade Corporation Operating Income $ 167,000 258,000 318,000
Summer Company sells all its output at 25 percent above cost. Parade Corporation purchases all its inventory from Summer. Selected information on the operations of the companies over the past three years is as follows: Summer Company Year 20X2 20X3 20X4 $ 202,000 177,000 285,000 Net Income $ 104,000 94,000 164,000 Inventory, December 31 $ 70,700 106, 200 152,000 Parade acquired 70 percent of the ownership of Summer on January 1, 20X1, at underlying book value. Required: Compute consolidated net income and income assigned to the controlling interest for 20X2, 20X3, and 20X4. Parade Corporation Sales to Parade Corporation Operating Income $ 167,000 258,000 318,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Summer Company sells all its output at 25 percent above cost. Parade Corporation purchases all its inventory from Summer. Selected
information on the operations of the companies over the past three years is as follows:
Year
20X2
20X3
20X4
Summer Company
Sales to Parade
Corporation
Net Income
Consolidated net income
Income assigned to the controlling interest
Parade Corporation
20X2
Inventory,
December 31
$ 70,700
106, 200
152,000
$ 202,000
177,000
285,000
$ 104,000
94,000
164,000
Parade acquired 70 percent of the ownership of Summer on January 1, 20X1, at underlying book value.
Required:
Compute consolidated net income and income assigned to the controlling interest for 20X2, 20X3, and 20X4.
Operating Income
$ 167,000
258,000
318,000
20X3
20X4
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