On January$1,20$X$7,$ Mannix Corporation purchased $80\%$ of the outstanding common stock of Raun Company. No excess of cost or book value resulted from the acquisition. The following information has been gathered pertaining from the acquisition to the two years of operation since Mannix$$s purchase of Raun Company stock.

Intercompany merchandise sales by Raun to Mannix were as follows:

Purchases

Remaining in Mannix

Year Sales Gross Profit Ending Inventory

$20$X$7$ $$40,00030\%$ $$10,000$

$20$X$850,00040\%15,000$

Mannix wrote down the merchandise from Raun and remaining in its ending inventory to $$13,000$ on December $31,20$X$8$

On December $31,20$X$8,$ Mannix owed $$10,000$ pertaining to intercompany sales.

Instructions:

Complete the partial worksheet for $20$X$8$

Prepare your elimination entries and post to them to worksheet Mannix Corporation and Subsidiary Raun Company

Partial Worksheet

For the Year Ended December $31,20$X$8$Mannix Corporation and Subsidiary Raun Company

Partial Worksheet

For the Year Ended December $31,20$X$8$

Trial Balance

Eliminations and Adjustments

Consolidated Income

Statement

Mannix

Raun

Dr$.$

Cr$.$

Accounts receivable $($net$)$

$200,000$

$71,000$

Inventory

$281,000$

$175,000$

Accounts payable

$(230,800)$

$(102,000)$

Retained earnings $$Mannix

$(827,000)$

Retained earnings $$ Raun

$(260,000)$

Sales

$(1,800,000)$

$(700,000)$

Cost of goods sold

$750,000$

$400,000$

Other expenses

$240,000$

$98,000$

Consolidated net income

To NCI

To controlling interest

Answer rating: 100% (QA)

To complete the partial worksheet for 20X8 and prepare the elimination entries for Mannix Corporatio... View the full answer