The individual financial statements for the two companies as well as consolidated totals for 2021 follow (credit balances indicated by parentheses): Sales Cost of goods sold. Operating expenses. income of Syber Separate company net income Consolidated net income Net income attributable to noncontrolling interest. Net income attributable to Parson Company Retained earnings, 1/1/21.. Net income (above) Dividends declared.. Retained earnings, 12/31/21. Cash and receivables. Inventory. Investment in Syber Company Land, buildings, and equipment. Trademarks Total assets Liabilities. Common stock Additional paid-in capital Noncontrolling interest in Syber. Retained earnings (above). Total liabilities and equities. Parson Company $ (800,000) 500,000 100,000 (74,800) $ (274,800) $ (611,600) (274,800) 70,000 $ (816,400) $ 298,000 190,000 368,400 380,000 -0- $ 1,236,400 $ (270,000) (120,000) (30.000) -0- (816,400) $(1,236,400) Syber Company $(600,000) 400,000 100,000 -0- $(100,000) $(290,000) (100,000) 30,000 $(360,000) $ 80,000 160,000 -0- 260,000 -0- $ 500,000 $ (60,000) (80,000) -0- -0- (360,000) $(500,000) Consolidated Totals c. What amount was originally allocated to the trademarks? d. What is the amount of the current-year intra-entity inventory sales? $(1,280,000) 784,000 202,500 $ (293,500) 18.700 $ (274,800) $ (611,600) (274,800) 70,000 $ (816,400) $ 358,000 338,000 -0- 640,000 32,500 $1,368,500 $ (310,000) (120,000) (30,000) (92,100) (816,400) $(1,368,500) a. What method does Parson use to account for its investment in Syber? b. What is the balance of the intra-entity inventory gross profit deferred at the end of the current period? e. Were the intra-entity inventory sales made upstream or downstream? f. What is the balance of the intra-entity liability at the end of the current year? g. What amount of intra-entity gross profit was deferred from the preceding period and recognized in the current period? h. How was the ending Noncontrolling Interest in Syber Company computed? i. With a tax rate of 21 percent, what income tax journal entry is recorded if the companies prepares a consolidated tax return? j. With a tax rate of 21 percent, what income tax journal entry is recorded if these two companies prepare separate tax returns?
The individual financial statements for the two companies as well as consolidated totals for 2021 follow (credit balances indicated by parentheses): Sales Cost of goods sold. Operating expenses. income of Syber Separate company net income Consolidated net income Net income attributable to noncontrolling interest. Net income attributable to Parson Company Retained earnings, 1/1/21.. Net income (above) Dividends declared.. Retained earnings, 12/31/21. Cash and receivables. Inventory. Investment in Syber Company Land, buildings, and equipment. Trademarks Total assets Liabilities. Common stock Additional paid-in capital Noncontrolling interest in Syber. Retained earnings (above). Total liabilities and equities. Parson Company $ (800,000) 500,000 100,000 (74,800) $ (274,800) $ (611,600) (274,800) 70,000 $ (816,400) $ 298,000 190,000 368,400 380,000 -0- $ 1,236,400 $ (270,000) (120,000) (30.000) -0- (816,400) $(1,236,400) Syber Company $(600,000) 400,000 100,000 -0- $(100,000) $(290,000) (100,000) 30,000 $(360,000) $ 80,000 160,000 -0- 260,000 -0- $ 500,000 $ (60,000) (80,000) -0- -0- (360,000) $(500,000) Consolidated Totals c. What amount was originally allocated to the trademarks? d. What is the amount of the current-year intra-entity inventory sales? $(1,280,000) 784,000 202,500 $ (293,500) 18.700 $ (274,800) $ (611,600) (274,800) 70,000 $ (816,400) $ 358,000 338,000 -0- 640,000 32,500 $1,368,500 $ (310,000) (120,000) (30,000) (92,100) (816,400) $(1,368,500) a. What method does Parson use to account for its investment in Syber? b. What is the balance of the intra-entity inventory gross profit deferred at the end of the current period? e. Were the intra-entity inventory sales made upstream or downstream? f. What is the balance of the intra-entity liability at the end of the current year? g. What amount of intra-entity gross profit was deferred from the preceding period and recognized in the current period? h. How was the ending Noncontrolling Interest in Syber Company computed? i. With a tax rate of 21 percent, what income tax journal entry is recorded if the companies prepares a consolidated tax return? j. With a tax rate of 21 percent, what income tax journal entry is recorded if these two companies prepare separate tax returns?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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