The financial statements of Post Company and Stamp Company on December 31, Year 5, were as foll Assets BALANCE SHEETS Cash Accounts receivable Inventories Equipment (net) Buildings (net) Investment in Stamp (at cost) $ Post 50,000 250,000 $ Stamp 10,000 100,000 520,000 3,000,000 6,150,000 2,500,000 2,600,000 500,000 850,000
The financial statements of Post Company and Stamp Company on December 31, Year 5, were as foll Assets BALANCE SHEETS Cash Accounts receivable Inventories Equipment (net) Buildings (net) Investment in Stamp (at cost) $ Post 50,000 250,000 $ Stamp 10,000 100,000 520,000 3,000,000 6,150,000 2,500,000 2,600,000 500,000 850,000
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
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 2MC: A prior period adjustment should be reflected, net of applicable income taxes, in the financial...
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![The financial statements of Post Company and Stamp Company on December 31, Year 5, were as follows:
Assets
BALANCE SHEETS
Cash
Accounts receivable
Inventories
Equipment (net)
Buildings (net)
Investment in Stamp (at cost)
Liabilities and Shareholders' Equity
Current liabilities
Long-term liabilities
Common shares
Retained earnings
Sales revenue
Other revenues
Cost of goods sold
Selling and administrative expenses
Other expenses
Income tax expense
Net income
Retained earnings, beginning balance
$
Dividends declared
Retained earnings, ending balance
Post
50,000
250,000
STATEMENTS OF INCOME AND RETAINED EARNINGS
Post
$3,500,000 $
300,000
3,800,000
1,700,000
300,000
200,000
300,000
4,000,000
3,000,000
5,600,000
$12,900,000
$
3,000,000
6,150,000 2,500,000
2,600,000
500,000
850,000
$12,900,000
Stamp
10,000
100,000
520,000
$
300,000 $ 170,000
1,100,000
500,000
1,860,000
$3,630,000
-
$3,630,000
Stamp
900,000
30,000
930,000
330,000
100,000
150,000
70,000
$2,500,000
650,000
1,300,000
280,000
$4,500,000 $ 1,600,000
5,800,000
18,800,000
200,000
$5,600,000
20,000
$ 1,860,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6e0fefd6-f6db-496c-9a39-e894d1c47056%2Fff67f1f5-180b-4253-9084-a99aa22b9110%2Fsprewn3_processed.png&w=3840&q=75)
Transcribed Image Text:The financial statements of Post Company and Stamp Company on December 31, Year 5, were as follows:
Assets
BALANCE SHEETS
Cash
Accounts receivable
Inventories
Equipment (net)
Buildings (net)
Investment in Stamp (at cost)
Liabilities and Shareholders' Equity
Current liabilities
Long-term liabilities
Common shares
Retained earnings
Sales revenue
Other revenues
Cost of goods sold
Selling and administrative expenses
Other expenses
Income tax expense
Net income
Retained earnings, beginning balance
$
Dividends declared
Retained earnings, ending balance
Post
50,000
250,000
STATEMENTS OF INCOME AND RETAINED EARNINGS
Post
$3,500,000 $
300,000
3,800,000
1,700,000
300,000
200,000
300,000
4,000,000
3,000,000
5,600,000
$12,900,000
$
3,000,000
6,150,000 2,500,000
2,600,000
500,000
850,000
$12,900,000
Stamp
10,000
100,000
520,000
$
300,000 $ 170,000
1,100,000
500,000
1,860,000
$3,630,000
-
$3,630,000
Stamp
900,000
30,000
930,000
330,000
100,000
150,000
70,000
$2,500,000
650,000
1,300,000
280,000
$4,500,000 $ 1,600,000
5,800,000
18,800,000
200,000
$5,600,000
20,000
$ 1,860,000
![Additional Information
Post owns 70 percent of Stamp and carries its investment in Stamp on its books by the cost method.
During Year 4, Post sold Stamp $100,000 worth of merchandise, of which $60,000 was resold by Stamp in the year. During Year 5, Post had sales of $200,000 to Stamp, of
which 40 percent was resold by Stamp. Intercompany sales are priced to provide Post with a gross profit of 30 percent of the sales price.
On December 31, Year 4, Post had in its inventories $150,000 of merchandise purchased from Stamp during Year 4. On December 31, Year 5, Post had in its ending inventories
$100,000 of merchandise that had resulted from purchases of $350,000 from Stamp during Year 5. Intercompany sales are priced to provide Stamp with a gross profit of 60
percent of the sale price.
Both companies are taxed at 25 percent.
Which of the following would appear on Post's consolidated balance sheet on December 31, Year 5, for non-controlling interest?
Multiple Choice
$721,500
$714,750
$694,500
$708,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6e0fefd6-f6db-496c-9a39-e894d1c47056%2Fff67f1f5-180b-4253-9084-a99aa22b9110%2Fxvygniu_processed.png&w=3840&q=75)
Transcribed Image Text:Additional Information
Post owns 70 percent of Stamp and carries its investment in Stamp on its books by the cost method.
During Year 4, Post sold Stamp $100,000 worth of merchandise, of which $60,000 was resold by Stamp in the year. During Year 5, Post had sales of $200,000 to Stamp, of
which 40 percent was resold by Stamp. Intercompany sales are priced to provide Post with a gross profit of 30 percent of the sales price.
On December 31, Year 4, Post had in its inventories $150,000 of merchandise purchased from Stamp during Year 4. On December 31, Year 5, Post had in its ending inventories
$100,000 of merchandise that had resulted from purchases of $350,000 from Stamp during Year 5. Intercompany sales are priced to provide Stamp with a gross profit of 60
percent of the sale price.
Both companies are taxed at 25 percent.
Which of the following would appear on Post's consolidated balance sheet on December 31, Year 5, for non-controlling interest?
Multiple Choice
$721,500
$714,750
$694,500
$708,000
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