Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2023, for $516,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $645,000, and the fair value of the 20 percent noncontrolling interest was $129,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the individual financial records of these two companies as of December 31, 2024: Items Sales Cost of goods sold Operating expenses Retained earnings, 1/1/24 Inventory Buildings (net) Investment income Protrade $ 760,000 350,000 Seacraft $ 480,000 257,000 162,000 117,000 860,000 300,000 358,000 122,000 370,000 169,000 Not given 0 Each of the following problems is an independent situation: Required: A a. Assume that Protrade sells Seacraft inventory at a markup equal to 60 percent of cost. Intra-entity transfers were $102,000 in 2023 and $122,000 in 2024. Of this inventory, Seacraft retained and then sold $40,000 of the 2023 transfers in 2024 and held $54,000 of the 2024 transfers until 2025. Determine balances for the following items that would appear on consolidated financial statements for 2024: Cost of Goods Sold Inventory Net Income Attributable to Noncontrolling Interest b. Assume that Seacraft sells inventory to Protrade at a markup equal to 60 percent of cost. Intra-entity transfers were $62,000 in 2023 and $92,000 in 2024. Of this inventory, $33,000 of the 2023 transfers were retained and then sold by Protrade in 2024, whereas $47,000 of the 2024 transfers were held until 2025. Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2023, for $516,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $645,000, and the fair value of the 20 percent noncontrolling interest was $129,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the individual financial records of these two companies as of December 31, 2024: Items Sales Cost of goods sold Operating expenses Retained earnings, 1/1/24 Inventory Buildings (net) Investment income Protrade $ 760,000 350,000 Seacraft $ 480,000 257,000 162,000 117,000 860,000 300,000 358,000 122,000 370,000 169,000 Not given 0 Each of the following problems is an independent situation: Required: A a. Assume that Protrade sells Seacraft inventory at a markup equal to 60 percent of cost. Intra-entity transfers were $102,000 in 2023 and $122,000 in 2024. Of this inventory, Seacraft retained and then sold $40,000 of the 2023 transfers in 2024 and held $54,000 of the 2024 transfers until 2025. Determine balances for the following items that would appear on consolidated financial statements for 2024: Cost of Goods Sold Inventory Net Income Attributable to Noncontrolling Interest b. Assume that Seacraft sells inventory to Protrade at a markup equal to 60 percent of cost. Intra-entity transfers were $62,000 in 2023 and $92,000 in 2024. Of this inventory, $33,000 of the 2023 transfers were retained and then sold by Protrade in 2024, whereas $47,000 of the 2024 transfers were held until 2025.
Expert Answer:
Answer rating: 100% (QA)
To determine the balances for the specified items that would appear on consolidated financial statements for 2024 we will analyze the intraentity tran... View the full answer
Related Book For
Advanced Accounting
ISBN: 9781264798483
15th Edition
Authors: Joe Ben Hoyle, Thomas Schaefer And Timothy Doupnik
Posted Date:
Students also viewed these accounting questions
-
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $612,000 in cash and other consideration. At the acquisition date, Protrade...
-
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2020, for $612,000 in cash and other consideration. At the acquisition date, Protrade...
-
Evenflow Power Co. is considering a new project that is a little riskier than the current operations of the company. Thus, management has decided to add an additional 1.5% to the company's overall...
-
Why might it be wise to machine away the thermally cut edge and heat-affected zone of metal that will be used as a stressed machine part?
-
A 15.0-g conducting rod of length 1.30 m is free to slide downward between two vertical rails without friction. The rails are connected to an 8.00- resistor, and the entire apparatus is placed in a...
-
Internal components of cathode-ray-tube televisions and computer monitors can become magnetized; the resulting magnetic field can deflect the electron beam and distort the colors on the screen....
-
Waverly Corporation encounters the following situations: 1. Waverly collects $1,750 from a customer in 2014 for services to be performed in 2015. 2. Waverly incurs utility expense which is not yet...
-
Firms do not know if they are safe or dangerous before they buy insurance. What would be the minimum price you, as a risk manger would sell insurance at and why?
-
An embankment is given (H = 5 m and y = 20 kN/m). Determine the vertical stress increase at points A, which is 5 m below the ground surface. Assume the embankment is constructed on the ground...
-
What other terms are used to describe deductions for adjusted gross income?
-
Is it possible to defer gain through the purchase of a new residence?
-
Explain the fruit-of-the-tree doctrine and why it was established by the courts.
-
What effect does interest on tax-exempt bonds have on the taxation of social security benefits?
-
What is a nonrecourse loan? Will a nonrecourse loan given by the seller of real estate to the buyer increase the amount the buyer has at risk? Explain.
-
Discuss documents that need to be included in recovery documentation?
-
Complete problem P10-21 using ASPE. Data from P10-21 Original cost ................................................................. $7,000,000 Accumulated depreciation...
-
Using Table 14.1 as a guide, do the following: A. Identify a topic for a presentation. B. Write how you could use each type of attention-getter: rhetorical question, vivid example, dramatic...
-
A. Identify a topic for a presentation. B. Write a positioning statement. C. Write a preview statement.
-
Identify a topic of interest. Create a storyboard to outline the titles, content, and related story line of your PowerPoint slides.
Study smarter with the SolutionInn App