X Corporation acquired an 80% interest in Y Corporation on January 1, 2014, when the book values of Y assets and liabilities were equal to their fair values. During 2014, Y sold merchandise that cost $70,000 to X for $86,000. On December 31, 2014, three-fourths of the merchandise acquired from Y remained in X's inventory. Separate incomes (investment income not included) of the two companies are as follows: X CO $180,000 Y CO • $160,000 Sales Revenue Cost of Goods Sold 120,000 90,000 • Operating Expenses 17,000 Separate incomes $ 43,000 Recorded journal entries & eliminations entry& prepare consolidation income statement on 31/12/2014? 21,000 49,000

X Corporation acquired an 80% interest in Y Corporation on January 1, 2014, when the book values of Y assets and liabilities were equal to their fair values. During 2014, Y sold merchandise that cost $70,000 to X for $86,000. On December 31, 2014, three-fourths of the merchandise acquired from Y remained in X's inventory. Separate incomes (investment income not included) of the two companies are as follows: X CO $180,000 Y CO • $160,000 Sales Revenue Cost of Goods Sold 120,000 90,000 • Operating Expenses 17,000 Separate incomes $ 43,000 Recorded journal entries & eliminations entry& prepare consolidation income statement on 31/12/2014? 21,000 49,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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