LOOSE-LEAF Advanced Financial Accounting with Connect
11th Edition
ISBN: 9781259605192
Author: Theodore E. Christensen
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 6, Problem 6.18P
To determine
Introduction: The consolidated income is the difference between the sum of the total operating income of the parent company and the net income of the subsidiary and the unrealized inventory profits of the two. The income assigned to controlling interest is the difference between income assigned to non-controlling interest and the consolidated net income.
The amount reported as consolidated net income and income assigned to the controlling interest for 20X2, 20X3 and 20X4
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Pirates PLC acquired 80% of Casino on 1 June 20X1. Sales from Casino to Pirates PLC throughout the year ended 30 September 20X1 were consistently $1 million per month. Casino made a mark-up on cost of 25% on these sales. At 30 September 20X1 Pirates PLC was holding $2 million inventory that had been supplied by Casino in the post-acquisition period.
By how much will the unrealised profit decrease the profit attributable to the non-controlling interest for the year ended 30 September 20X1?
Select one alternative
$1,000,000
$80,000
$500,000
$400,000
COMPUTE FOR:
1. Consolidated Gross Profit
2. Consollidated Operating expenses
Compute for the consolidated operating expense as of December 31, 20x7
Chapter 6 Solutions
LOOSE-LEAF Advanced Financial Accounting with Connect
Ch. 6 - Why must inventory transfers to related companies...Ch. 6 - Why is there a need for a consolidation entry when...Ch. 6 - Prob. 6.3QCh. 6 - How do unrealized intercompany profits on a...Ch. 6 - How do unrealized intercompany profits on an...Ch. 6 - Prob. 6.6QCh. 6 - Prob. 6.9QCh. 6 - Prob. 6.10QCh. 6 - How is the amount of consolidated retained...Ch. 6 - How will the elimination of unrealized...
Ch. 6 - Prob. 6.14QCh. 6 - Is an inventory sale from one subsidiary to...Ch. 6 - Prob. 6.16QCh. 6 - Prob. 6.1.1ECh. 6 - Prob. 6.1.2ECh. 6 - MultipleChoice Questions on Intercompany Inventory...Ch. 6 - MultipleChoice Questions on Intercompany Inventory...Ch. 6 - Prob. 6.1.5ECh. 6 - Prob. 6.1.6ECh. 6 - Prob. 6.3.1ECh. 6 - Prob. 6.3.2ECh. 6 - Prob. 6.3.3ECh. 6 - Prob. 6.4.1ECh. 6 - Prob. 6.4.2ECh. 6 - Prob. 6.4.3ECh. 6 - Prob. 6.4.4ECh. 6 - Prob. 6.5.1ECh. 6 - Prob. 6.5.2ECh. 6 - Prob. 6.5.3ECh. 6 - Prob. 6.7ECh. 6 - Prob. 6.8ECh. 6 - Prob. 6.9ECh. 6 - Prob. 6.10ECh. 6 - Prob. 6.11ECh. 6 - Prob. 6.12ECh. 6 - Prob. 6.13ECh. 6 - Prob. 6.15ECh. 6 - Prior-Period Inventory Profits Home Products...Ch. 6 - Prob. 6.17PCh. 6 - Prob. 6.18PCh. 6 - Prob. 6.19PCh. 6 - Prob. 6.20PCh. 6 - Prob. 6.21PCh. 6 - Prob. 6.22PCh. 6 - Prob. 6.24PCh. 6 - Prob. 6.26PCh. 6 - Prob. 6.27PCh. 6 - Prob. 6.28PCh. 6 - Prob. 6.29PCh. 6 - Prob. 6.30PCh. 6 - Prob. 6.31PCh. 6 - Prob. 6.33PCh. 6 - Prob. 6.34PCh. 6 - Prob. 6.35APCh. 6 - Prob. 6.36AP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Determine the consolidated balances of SALES in the year 20x6.arrow_forwardun.3arrow_forwardFromage purchased 80% of the equity shares in Frais on 1 January 20X1. During the year ended 31 December 20X1, Fromage sold inventory to Frais at a sales price of £50,000. None of the goods remained in Frais' inventory. Fromage applied a margin of 20%. Extracts from the statement of profit or loss for the two entities are shown below: Fromage Frais £000 £000 Revenue 1,000 750 Cost of sales (650) (250) What would be the revenue and cost of sales figures reported in the consolidated statement of profit or loss for the year ended 31 December 20X1? Answer to the nearest £000 a. Revenue 1700 Cost of sales 850 O b. Revenue 1750 Cost of sales 910 O c. Revenue 1700 Cost of sales 860 d. None of these options are correct Revenue 1550 Cost of sales 800arrow_forward
- What is the non-controlling Interest in Net Income for the year 20x6? The Non-controlling Interest in Net Assets of Subsidiary for 20x6 should be?arrow_forwardOn January 1, 2021, PCO purchased 70% ownership of SCO which resulted to a gain on acquisition of P100,000. Net assets of SCO were fairly valued except for inventory which was understated by P1,500,000. A third of these inventories remained unsold as of the end of the calendar year. The operations of the two companies for 2021 are as follows: PCO SCO Sales P3,100,000 P2,600,000 (COGS) (1,300,000) (1,250,000) Gross profit 1,800,000 1,350,000 (OPEX) (200,000) (150,000) Other income 0 200,000 (Other expenses) (120,000) 0 Net income P1,480,000 P 400,000 Q1: In the consolidated statement of comprehensive income for the year ended December 31, 2021, how much is the cost of goods sold? 1,550,000 1,850,000 3,550,000 3,250,000 Q2: based on the information above, In the consolidated statement of comprehensive income for the year ended December 31, 2021, how much is the consolidated net income attributable to…arrow_forwardOn January 1, 2021, PCO purchased 70% ownership of SCO which resulted to a gain on acquisition of P100,000. Net assets of SCO were fairly valued except for inventory which was understated by P1,500,000. A third of these inventories remained unsold as of the end of the calendar year. The operations of the two companies for 2021 are as follows: PCO SCO Sales P3,100,000 P2,600,000 (COGS) (1,300,000) (1,250,000) Gross profit 1,800,000 1,350,000 (OPEX) (200,000) (150,000) Other income 0 200,000 (Other expenses) (120,000) 0 Net income P1,480,000 P 400,000 In the consolidated statement of comprehensive income for the year ended December 31, 2021, how much is the cost of goods sold? Group of answer choices a.1,850,000 b.3,550,000 c.1,550,000 d.3,250,000arrow_forward
- What is the consolidated sales for the year 20x6?arrow_forwardK Company owns 100% of E Company. During the year, Kianapurchased inventory from Elyssa at a mark-up of 20% based on cost.How should the group compute for consolidated cost of sales?a. Cost of Sales of K + Cost of Sales of E– intercompany sales + Realized profit in beginning inventory – Unrealized profit in ending inventory.b. Cost of Sales of K + Cost of Sales of E – intercompany sales – Realized profit in beginning inventory + Unrealized profit in ending inventory.c. Cost of Sales of Kiana + Cost of Sales of Elyssa – Intercompany sales d. Cost of Sales of K + Cost of Sales of Earrow_forwardDetermine the consolidated balances of the sales account in the year 20x6.arrow_forward
- What are the consolidated balances for? Cost of Goods Sold Net income attributable to non-controlling Interest ClipRite sold ProForm inventory costing $72,000 during the last six months of 2020 for $120,000. At year-end, 30 percent remained ClipRite sold ProForm inventory costing $200,000 during 2021 for $250,000. At yearend, 10% percent is left. Proform acquired 70 percent of ClipRite on June 30, 2020, for $910,000 in cash. Based on ClipRites acquisition-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $10,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $390,000 at the acquisition date. The 2021 financial statements are as follows: Proform ClipRite Sales -800,000 -600,000 Costs of goods sold 535,000 400,000 Operating expenses 100,000 100,000 Dividend Income -35,000 Net Income…arrow_forwardP Co acquired 60% of the equity of S Co on 1 April 20X5. The statements of profit or loss of the two companies for the year ended 31 December 20X5 are set out below. P Co $ S Co Revenue Cost of sales Gross profit Administrative expenses Profit before tax Income taxes Profit for the year Note. 170,000 65,000 105,000 43,000 62,000 23,000 39,000 80,000 36,000 44,000 12,000 32,000 8,000 24,000 Retained earnings brought forward 81,000 40,000 Retained earnings carried forward 108,000 58,000 Required Prepare the consolidated statement of profit or loss and movements on retained earningsarrow_forwardOn January 1, Year 2, PAT Ltd. acquired 90% of SAT Inc. when SAT's retained earnings were $1,000,000. There was no acquisition differential. PAT accounts for its investment under the cost method. SAT sells inventory to PAT on a regular basis at a markup of 30% of selling price. The intercompany sales were $160,000 in Year 2 and $190,000 in Year 3. The total amount owing by PAT related to these intercompany sales was $60,000 at the end of Year 2 and $50,000 at the end of Year 3. On January 1, Year 3, the inventory of PAT contained goods purchased from SAT amounting to $70,000, while the December 31, Year 3, inventory contained goods purchased from SAT amounting to $80,000. Both companies pay income tax at the rate of 40%. Selected account balances from the records of PAT and SAT for the year ended December 31, Year 3, were as follows: Inventory Accounts Payable Retained Earnings, Beg. of Year Sales Cost of Sales Income Tax Expense PAT $510,000 700,000 2,500,000 4,100,000 3,200,000…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
What Are Stock Buybacks and Why Are They Controversial?; Author: TD Ameritrade;https://www.youtube.com/watch?v=2O4bmcliaog;License: Standard youtube license