Big. Co purchased 80% of Little Co common stock on 1/1/22 for $320,000

The fair value of the NC Interest was $80,000 on that date.

Little's book value was $400,000, and all assets and liabilities had fair values equal to the book value.

During 2022 and 2023, Little sold merchandise to Big for subsequent resale. These intercompany sales were as follows:

Year	Sales price	Cost	Resold in 2022	Resold in 2023	Resold in 2024
2022	100,000	80,000	40%	50%	10%
2023	140,000	105,000	N/A	70%	30%

Big Co uses the partial equity method to account for their investment

At the end of 2022 and 2023, the consolidation worksheets below are provided.

Prepare appropriate elimination entries and complete the worksheets, and answer the highlighted blanks provided below.

 

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2022 Sales Cost of Goods sold Other expenses Investment income Net income Income to NC Interest Income to Controlling interest Beginning R/E Add: Income Less: Dividends Ending R/E Inventory Other current assets Investment in Little Other NC Assets Liabilities CS RE NC Interest Big Little 500000 350000 300000 200000 100000 75000 50400 150400 300000 150400 0 450400 75000 250000 75000 0 325000 80000 50000 370400 250000 515000 70000 40000 200000 150000 100000 150000 450400 325000 2023 Sales Cost of Goods sold Other expenses Investment income Net income Income to NC Interest Income to Controlling interest Beginning R/E Add: Income Less: Dividends Ending R/E Inventory Other current assets Investment in Little Other NC Assets Liabilities CS RE NC Interest Big 450000 320000 120000 15600 25600 450400 25600 0 476000 80000 50000 386000 260000 200000 100000 476000 Little 325000 220000 85000 20000 325000 20000 0 345000 70000 40000 535000 150000 150000 345000 2022 Sales Cost of Goods sold Other expenses Investment income Net income Income to NC Interest Income to Controlling interest Beginning R/E Add: Income Less: Dividends Ending R/E Inventory Other current assets Investment in Little Other NC Assets Liabilities CS RE NC Interest Big Little 500000 350000 300000 200000 100000 75000 50400 150400 300000 150400 0 450400 75000 250000 75000 0 325000 80000 50000 370400 250000 515000 70000 40000 200000 150000 100000 150000 450400 325000 2023 Sales Cost of Goods sold Other expenses Investment income Net income Income to NC Interest Income to Controlling interest Beginning R/E Add: Income Less: Dividends Ending R/E Inventory Other current assets Investment in Little Other NC Assets Liabilities CS RE NC Interest Big 450000 320000 120000 15600 25600 450400 25600 0 476000 80000 50000 386000 260000 200000 100000 476000 Little 325000 220000 85000 20000 325000 20000 0 345000 70000 40000 535000 150000 150000 345000 2022 Sales Cost of Goods sold Other expenses Investment income Net income Income to NC Interest Income to Controlling interest Beginning R/E Add: Income Less: Dividends Ending R/E Inventory Other current assets Investment in Little Other NC Assets Liabilities CS RE NC Interest Big Little 500000 350000 300000 200000 100000 75000 50400 150400 300000 150400 0 450400 75000 250000 75000 0 325000 80000 50000 370400 250000 515000 70000 40000 200000 150000 100000 150000 450400 325000 2023 Sales Cost of Goods sold Other expenses Investment income Net income Income to NC Interest Income to Controlling interest Beginning R/E Add: Income Less: Dividends Ending R/E Inventory Other current assets Investment in Little Other NC Assets Liabilities CS RE NC Interest Big 450000 320000 120000 15600 25600 450400 25600 0 476000 80000 50000 386000 260000 200000 100000 476000 Little 325000 220000 85000 20000 325000 20000 0 345000 70000 40000 535000 150000 150000 345000

Answer rating: 100% (QA)

Okay here are the detailed workings Elimination Entries for 2022 1 Dr Investment in Little Co Cr NC ... View the full answer