On January 1, 2012, Aspen Company acquired 80 percent of Birch Company's outstanding voting stock for $438,000.
Question:
These companies report the following financial information. Investment income figures are not included.
Assume that each of the following questions is independent:
a. If all companies use the equity method for internal reporting purposes, what is the December 31, 2013, balance in Aspen's Investment in Birch Company account?
b. What is the consolidated net income for this business combination for 2014?
c. What is the net income attributable to the non-controlling interest in 2014?
d. Assume that Birch made intra-entity inventory transfers to Aspen that have resulted in the following unrealized gross profits at the end of each year:
Date________________________ Amount
12/31/12.................................$16,600
12/31/13..................................23,600
12/31/14..................................33,200
What is the realized income of Birch in 2013 and 2014, respectively?
Step by Step Answer:
Advanced Accounting
ISBN: 978-0078025402
11th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik