Sunny Company acquired 80 percent ownership of Albert Company's voting shares on January 1, 20X2 with no differential. During 20X5, Sunny purchased inventory for $64,000 and sold the full amount to Albert Company for $80,000. On December 31, 20X5, Albert's ending inventory included $25,000 of items purchased from Sunny. In addition, in 20X5, Albert purchased inventory for $80,000 and sold the units to Sunny for $120,000. Sunny included $30,000 of its purchase from Albert in ending inventory on December 31, 20X5. For 20X5, Suni ported $260,000 income from its operations. Albert reported $200,000 of net income. Assume Sunny uses the fully adjusted equity method. The following selected account balances are from the individual financial records of these two companies as of December 31, 20X5: Sales Cost of goods sold Inventory Sunny Albert $900,000 $600,000 540,000 350,000 240,000 120,000 Answer the following questions: (Do not add dollar sign; do not add comma to your amount; round the answer to the whole number) 1. What amount unrealized inventory profit exists in Albert's inventory at the end of year 20X5? 2. What amount of unrealized inventory profit exists in Sunny's inventory at the end of year 20X5? 3. What is the amount of Income from Albert reported on Sunny's book for year 20X5? 4. What amount of income will be assigned to the noncontrolling interest in the 20X5 consolidated income statement? 5. What amount of sales will be reported in the 20X5 consolidated income statement? 6. What amount of cost of goods sold will be reported in the 20X5 consolidated income statement? 7. What inventory balance will be reported by the consolidated entity on December 31, 20X5?
Sunny Company acquired 80 percent ownership of Albert Company's voting shares on January 1, 20X2 with no differential. During 20X5, Sunny purchased inventory for $64,000 and sold the full amount to Albert Company for $80,000. On December 31, 20X5, Albert's ending inventory included $25,000 of items purchased from Sunny. In addition, in 20X5, Albert purchased inventory for $80,000 and sold the units to Sunny for $120,000. Sunny included $30,000 of its purchase from Albert in ending inventory on December 31, 20X5. For 20X5, Suni ported $260,000 income from its operations. Albert reported $200,000 of net income. Assume Sunny uses the fully adjusted equity method. The following selected account balances are from the individual financial records of these two companies as of December 31, 20X5: Sales Cost of goods sold Inventory Sunny Albert $900,000 $600,000 540,000 350,000 240,000 120,000 Answer the following questions: (Do not add dollar sign; do not add comma to your amount; round the answer to the whole number) 1. What amount unrealized inventory profit exists in Albert's inventory at the end of year 20X5? 2. What amount of unrealized inventory profit exists in Sunny's inventory at the end of year 20X5? 3. What is the amount of Income from Albert reported on Sunny's book for year 20X5? 4. What amount of income will be assigned to the noncontrolling interest in the 20X5 consolidated income statement? 5. What amount of sales will be reported in the 20X5 consolidated income statement? 6. What amount of cost of goods sold will be reported in the 20X5 consolidated income statement? 7. What inventory balance will be reported by the consolidated entity on December 31, 20X5?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sunny Company acquired 80 percent ownership of Albert Company's voting shares on January 1, 20X2 with no differential.
During 20X5, Sunny purchased inventory for $64,000 and sold the full amount to Albert Company for $80,000. On December 31, 20X5, Albert's ending inventory included $25,000 of items
purchased from Sunny. In addition, in 20X5, Albert purchased inventory for $80,000 and sold the units to Sunny for $120,000. Sunny included $30,000 of its purchase from Albert in ending
inventory on December 31, 20X5.
For 20X5, Sunn, eported $260,000 income from its operations. Albert reported $200,000 of net income. Assume Sunny uses the fully adjusted equity method.
The following selected account balances are from the individual financial records of these two companies as of December 31, 20X5:
Sales
Cost of goods sold
Inventory
Sunny
Albert
$900,000 $600,000
540,000 350,000
240,000
120,000
Answer the following questions:
(Do not add dollar sign; do not add comma to your amount; round the answer to the whole number)
1. What amount of unrealized inventory profit exists in Albert's inventory at the end of year 20X5?
2. What amount of unrealized inventory profit exists in Sunny's inventory at the end of year 20X5?
3. What is the amount of Income from Albert reported on Sunny's book for year 20X5?
▸
What amount of income will be assigned to the noncontrolling interest in the 20X5 consolidated income statement?
5. What amount of sales will be reported in the 20X5 consolidated income statement?
6. What amount of cost of goods sold will be reported in the 20X5 consolidated income statement?
7. What inventory balance will be reported by the consolidated entity on December 31, 20X5?
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