King Company owns a 90 percent interest in the outstanding voting shares of Pawn Company. No excess fair-value amortization resulted from the acquisition. Pawn reports a net income of $110,000 for the current year. Intra-entity sales occur at regular intervals between the two companies. Unrealized gross profits of $30,000 were present in the beginning inventory balances, whereas $60,000 in similar gross profits were recorded at year-end. What is the noncontrolling interest’s share of the subsidiary’s net income?
Answer to relevant QuestionsWhen a subsidiary sells inventory to a parent, the intra-entity profit is removed from the subsidiary’s income and reduces the income allocation to the noncontrolling interest. Is the profit permanently eliminated from the ...Barker Company owns 80 percent of the outstanding voting stock of Walden Company. During the current year, intra-entity sales amount to $100,000. These transactions were made with a gross profit rate of 40 percent of the ...What is the total of consolidated cost of goods sold?a. $140,000.b. $152,000.c. $132,000.d. $145,000.Use the following data for problem:On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for ...Penguin Corporation acquired 80 percent of the outstanding voting stock of Snow Company on January 1, 2010, for $420,000 in cash and other consideration. At the acquisition date, Penguin assessed Snow’s identifiable assets ...Compute the balances in problem 28 again, assuming that all intra-entity transfers were made from Zeigler to Bennett.
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