On January 1, 2010, Phelps Company purchased an 85% interest in Sloane Company for $955,000 when the retained earnings of
On January 1, 2010, Phelps Company purchased an 85% interest in Sloane Company for $955,000 when the retained earnings of Sloane Company were $150,000. The difference between implied and book value was assigned as follows:
Discount on Bonds Payable...48,000
One-half of the inventory was sold in 2010 and the remaining inventory was sold in 2011. Thebonds mature in eight years. On December 31, 2010, Phelps Companyâ€™s inventory contained $10,000 in unrealized intercompany profit. During 2011 Phelps Company sold merchandise with a cost of $200,000 to Sloane Company at a 30% markup on cost. Only $65,000 (selling price) of this merchandise remains in Sloane Companyâ€™s 2011 ending inventory. As of December 31, 2011, Sloane Company owes Phelps Company $40,000 for merchandise purchased during 2011. Equipment with a book value of $500,000 was sold by Sloane Company on January 2, 2011, to Phelps Company for $640,000. This equipment had an estimated useful life when purchased by Sloane Company on July 1, 2008, of 10 years.
Financial data for 2011 are presented here:
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Prepare a consolidated financial statements workpaper for the year ended December 31,2011.
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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