Question: Pace Company owns 85 of the outstanding common stock of

Pace Company owns 85% of the outstanding common stock of Sand Company and all the outstanding common stock of Star Company. During 2012, the affiliates engaged in intercompany sales as follows:
Sales of Merchandise
Pace to Sand....... $ 40,000
Sand to Pace....... 60,000
Sand to Star....... 75,000
Star to Pace....... 50,000
The following amounts of intercompany profits were included in the December 31,2011, and December 31, 2012, inventories of the individual companies:

Income from each company’s independent operations (including sales to affiliates) for the year ended December 31, 2012, is presented here:
Pace Company...... $200,000
Sand Company...... 150,000
Star Company ...... 125,000

A. Prepare in general journal form the workpaper entries necessary to eliminate intercompany sales and intercompany profit in the December 31, 2012, consolidated financial statements workpaper.
B. Calculate the balance to be reported in the consolidated income statement for the following line items:
Consolidated income Noncontrolling interest in consolidated income
Controlling interest in consolidatedincome
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  • CreatedMarch 13, 2015
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