Pal Company acquired an 80 percent interest in Sal Corporation at book value equal to fair value
Question:
Pal Company acquired an 80 percent interest in Sal Corporation at book value equal to fair value on January 1, 2011.
During the year, Sal sold $100,000 inventory items to Pal, and at December 31, 2011, unrealized profits amounted to $30,000. Separate incomes of Pal and Sal for 2011 were $500,000 and $300,000, respectively.
REQUIRED
1. Determine consolidated net income for Pal Company and Subsidiary under the parent-company theory of consolidation.
2. Determine total consolidated income for Pal Company and Subsidiary, income to controlling stockholders, and income to noncontrolling stockholders under the entity theory of consolidation.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Advanced Accounting
ISBN: 9780132568968
11th Edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith