The standalone income statements Magenta Corporation and its wholly owned subsidiary, Vegas Co., for 2XX2 are presented
Question:
The standalone income statements Magenta Corporation and its wholly owned subsidiary, Vegas Co., for 2XX2 are presented below:
Magenta | Vegas | |
---|---|---|
Sale revenue | $1,560,000 | $273,000 |
Cost of goods sold | 640,000 | 152,000 |
Gross profit | 920,000 | 121,000 |
Operating expenses | 320,000 | 64,000 |
Net income | $600,000 | $57,000 |
Note that Magenta's income statement includes no investment-related accounting or adjustments for Vegas. During 2XX1, Magenta sold merchandise costing $36,000 to Vegas for $80,000. At the end of 2XX1, 35% of the merchandise remained unsold by Vegas and was sold in 2XX2. During 2XX2, Magenta sold merchandise costing $27,000 to Vegas for $60,000. At the end of 2XX2, 40% of the merchandise remained unsold by Vegas.
Required Please explain how to prepare a consolidated income statement for 2XX2. Note: Use negative signs to indicate items that decrease net income.
Consolidated Income Statement | |
---|---|
Answer | |
Answer | |
Answer | |
Financial And Managerial Accounting
ISBN: 9780357714041
16th Edition
Authors: Carl S. Warren, Jefferson P. Jones, William Tayler