Plaintain Company owns 100% of Syncopati Inc. The excess of acquisition cost over book value was...
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Plaintain Company owns 100% of Syncopati Inc. The excess of acquisition cost over book value was attributed entirely to previously unrecorded identifiable intangibles. For 2021, Syncopati reported net income of $6,000,000 and declared and paid dividends of $1,500,000. Amortization of the previously unrecorded identifiable intangibles for 2021 is $1,200,000. The following information is available regarding intercompany transactions: 1. During 2021, Syncopati sold services to Plaintain for $1,000,000. Plaintain still owes Syncopati $100,000 for those services at year-end. 2. Plaintain's ending inventory at December 31, 2021, included merchandise acquired from Syncopati; the unconfirmed profit on this inventory was $300,000. 3. Plaintain's ending inventory at December 31, 2020, included merchandise acquired from Syncopati; the unconfirmed profit on this inventory was $400,000. 4. Syncopati's ending inventory at December 31, 2021, included merchandise acquired from Plaintain; the unconfirmed profit on this inventory was $150,000. 5. Syncopati's ending inventory at December 31, 2020, included merchandise acquired from Plaintain; the unconfirmed profit on this inventory was $225,000. Required: a. Calculate Plaintain Company's equity in net income for 2021. b. Prepare the working paper eliminations made in consolidation at December 31, 2021, related to the intercompany ("I") transactions ONLY. Plaintain Company owns 100% of Syncopati Inc. The excess of acquisition cost over book value was attributed entirely to previously unrecorded identifiable intangibles. For 2021, Syncopati reported net income of $6,000,000 and declared and paid dividends of $1,500,000. Amortization of the previously unrecorded identifiable intangibles for 2021 is $1,200,000. The following information is available regarding intercompany transactions: 1. During 2021, Syncopati sold services to Plaintain for $1,000,000. Plaintain still owes Syncopati $100,000 for those services at year-end. 2. Plaintain's ending inventory at December 31, 2021, included merchandise acquired from Syncopati; the unconfirmed profit on this inventory was $300,000. 3. Plaintain's ending inventory at December 31, 2020, included merchandise acquired from Syncopati; the unconfirmed profit on this inventory was $400,000. 4. Syncopati's ending inventory at December 31, 2021, included merchandise acquired from Plaintain; the unconfirmed profit on this inventory was $150,000. 5. Syncopati's ending inventory at December 31, 2020, included merchandise acquired from Plaintain; the unconfirmed profit on this inventory was $225,000. Required: a. Calculate Plaintain Company's equity in net income for 2021. b. Prepare the working paper eliminations made in consolidation at December 31, 2021, related to the intercompany ("I") transactions ONLY.
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Note Intercompany transcation before business acquistion will be ignored Note It is assumed that Acq... View the full answer
Related Book For
Introduction to Financial Accounting
ISBN: 978-0133251036
11th edition
Authors: Charles Horngren, Gary Sundem, John Elliott, Donna Philbrick
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