Upstream Sales LO 2 LO 5 Shell Company, an 85% owned subsidiary of Plaster Company, sells merchandise to Plaster Company at a markup of 20% of selling price. During 2019 and 2020, intercompany sales amounted to $442,500 and $386,250, respectively. At the end of 2019, Plaster had one-half of the goods that it purchased that year from Shell in its ending inventory. Plaster's 2020 ending inventory contained one-fifth of that year's purchases from Shell. There were no intercompany sales prior to 2019. Plaster had net income in 2019 of $750,000 from its own operations and in 2020 its independent income was $780,000. Shell reported net income of $322,500 and $335.400 for 2019 and 2020, respectively. Required: A. Prepare in general journal form all entries necessary on the consolidated financial statement workpapers to eliminate the effects of the intercompany sales for each of the years 2019 and 2020. B. Calculate the amount of noncontrolling interest to be deducted from consolidated income in the consolidated income statement for 2020. C. Calculate controlling interest in consolidated income for 2020.

Upstream Sales LO 2 LO 5 Shell Company, an 85% owned subsidiary of Plaster Company, sells merchandise to Plaster Company at a markup of 20% of selling price. During 2019 and 2020, intercompany sales amounted to $442,500 and $386,250, respectively. At the end of 2019, Plaster had one-half of the goods that it purchased that year from Shell in its ending inventory. Plaster's 2020 ending inventory contained one-fifth of that year's purchases from Shell. There were no intercompany sales prior to 2019. Plaster had net income in 2019 of $750,000 from its own operations and in 2020 its independent income was $780,000. Shell reported net income of $322,500 and $335.400 for 2019 and 2020, respectively. Required: A. Prepare in general journal form all entries necessary on the consolidated financial statement workpapers to eliminate the effects of the intercompany sales for each of the years 2019 and 2020. B. Calculate the amount of noncontrolling interest to be deducted from consolidated income in the consolidated income statement for 2020. C. Calculate controlling interest in consolidated income for 2020.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Current Attempt in Progress Oriole Corporation sells item A as part of its product line. Information as to balances on hand, purchases, and sales of item A are given in the following table for the first six months of 2020. Date January 11 January 24 February 8 March 16 June 11 Purchased 1,380 660 Ending inventory $ Save for Later Quantities Cost of goods sold $ Sold 360 610 Balance 460 1,840 1,480 870 1,530 Unit Price of Purchase $4.60 Compute the ending inventory at June 30 under the perpetual LIFO inventory pricing method. $4.9 $5.3 Compute the cost of goods sold for the first six months under the periodic FIFO inventory pricing method. Attempts: 0 of 1 used Submit Answer
ail, and cost indexes for 2024 and 2025 are as follows: 2024 2025 Cost Retail Cost Retail Beginning inventory $ 39,200 $ 56,000 Net purchases 92,600 116,000 $ 104,166 $ 128,400 Freight-in 2,800 3,300 Net markups 14,000 9,600 Net markdowns 2,800 3,000 Net sales to customers 113,355 117,120 Sales to employees (net of 20% discount) 3,300 5,280 Price Index: January 1, 2024 1.00 December 31, 2024 1.06 December 31, 2025 1.10 Required: Estimate the 2024 and 2025 ending inventory and cost of goods sold using the dollar-value LIFO retail inventory method.
None
Current Attempt in Progress Sheridan Industries had the following inventory transactions occur during 2025, its first year of operations: Units Cost/unit Feb. 1, 2025 Purchase 93 $39 Mar. 14, 2025 Purchase 160 $40 May 1, 2025 Purchase 114 $42 The company sold 263 units at $54 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, and operating expenses of $1548, what is the company's net income using LIFO? O $1544.90 O $1334.20 O $1906.00 O $2207.00
The 2021 inventory data for Island Corporation is presented below. Assume that Island uses periodic inventory tracking. 2021 Beginning Inventory (purchased in 2020) 100 units @ $28 per unit Purchases: Purchase 1 on 1/20/21 300 units @ $30 per unit Purchase 2 on 6/15/21 1,100 units @ $34 per unit Sales: Sale 1 on 4/8/21 520 units @ $60 per unit Sale 2 on 9/25/21 860 units @ $60 per unit When Island examines the actual units in ending inventory, they see that 30 of the units are from 2021 beginning inventory, 40 units are from the 1/20/21 purchase, and 50 units are from the 6/15/21 purchase. What is Inventory on the 12/31/21 Balance Sheet if Island uses FIFO? $3,400 $4,080 $45,120 $45,800 What is Cost of Goods Sold on the 2021 Income Statement if Island uses LIFO? $3,400 $4,080 $45,120 $45,800 What is Inventory on the 12/31/21 Balance Sheet if Island…
Background Jimmy's Sweets Company sells a lovely range of irresistible sweets to the general public. Jimmy has calculated the following ratio analysis for the years ending 2020 and 2019 below: 2020 2019 Current Ratio 3.20 1.50 Quick Ratio 0.30 1.20 Inventory Turnover (days) 17 days 22 days Accounts Receivable Turnover (days) 62 days 32 days Question Which answer below is the correct interpretation of the change in each ratio, from 2019 to 2020? Select one: O a. Current Ratio is worse, Quick Ratio is worse, Inventory Turnover is worse, Accounts Receivable Turnover is worse. O b. Current Ratio is better, Quick Ratio is better, Inventory Turnover is better, Accounts Receivable Turnover is better. O c. Current Ratio is better, Quick Ratio is worse, Inventory Turnover is better, Accounts Receivable Turnover is better. O d. Current Ratio is better, Quick Ratio is worse, Inventory Turnover is better, Accounts Receivable Turnover is worse.
View Policies Current Attempt in Progress Whispering Winds Corporation uses a perpetual inventory system and had inventory worth $88,500 at the beginning of the year. Purchases were made during the year for $393,000; however, 10% of these goods were returned to the supplier, and a 3% discount was taken on the remaining balance owing. Whispering Winds paid $3,500 cash for freight to ship the inventory to its location during the year. Whispering Winds reported cost of goods sold for the year of $295,000. Whispering Winds has a calendar year end. What is the balance in the inventory account at the end of the year? Balance If Whispering Winds counted its actual inventory balance as $118,000 at the end of the year, what adjusting entry, if any, would be made? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit…
Inventory turnover________ times Days in invitory __________ days
10.
A company purchased merchandise to be resold at increasing costs during the year 2020. The purchases were made at the following costs January 1,2020 (Carried over from 2019) 20 unit at $10 January 25,2020 purchase 40 unit at $11 June 20, 2020 purchase 40 unit at $12 October 10, 2020 purchase 50 unit at $13 Assuming the LIFO perpetual cost flow assumption, what will be the company's cost of goods sold if 10 units were sold on the last day of each month during the year 2020? Select one:A. $1,460B. $1,386C. $1,416D. $1,410