Q: prepare a schedule of the intracompany transactions affecting the 2022 consolidated net income of Pretty inc

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estion 1 t yet swered arked out of 0.00 Flag question Pretty Inc. owns 70% of Sweety Inc, which it purchased on January 1, 2021 for $2,800,000. Pretty uses the fair value enterprise method to calculate the value of the non-controlling interest. On that date, Sweety's net assets were as follows: Retained earnings Common stock $2,800,000 $350,000 The book values and fair market values of Sweety's identifiable assets and liabilities on the date of acquisition were equal except as noted below: atc rofi profi 11 Inventory Land PP&E (net) (10 year remaining life). - Bonds payable (5 years to maturity) Book Value Fair Value $230,000 $220,000 $300,000 $280,000 $1,250,000 $1,450,000 $520,000 $560,000 On February 1, 2022, Pretty sold land to Sweety at a gain of $32,000. At December 31, 2021, Pretty had $62,000 of inventory purchased from Sweety. During 2022, Sweety sold $345,000 of inventory to Pretty and $58,000 of these sales remained in Pretty's inventory at December 31, 2022. At December 31, 2021, Sweety had $24,000 of inventory purchased from Pretty during 2021. During 2022 Pretty sold $220,000 of inventory to Sweety and $29,000 of these sales remained in Sweety's inventory at December 31, 2022. All sales of both companies are priced to provide the seller with a gross profit of 40%. The goodwill associated with this business combination was tested for impairment on December 31, DIT: 19,440 7,391 MAI tv 2 A W 4 Finish attempt... Alternating Row Color Row & Column Size NEW W estion 1 t yet swered arked out of 0.00 Flag question Pretty Inc. owns 70% of Sweety Inc, which it purchased on January 1, 2021 for $2,800,000. Pretty uses the fair value enterprise method to calculate the value of the non-controlling interest. On that date, Sweety's net assets were as follows: Retained earnings Common stock $2,800,000 $350,000 The book values and fair market values of Sweety's identifiable assets and liabilities on the date of acquisition were equal except as noted below: atc rofi profi 11 Inventory Land PP&E (net) (10 year remaining life). - Bonds payable (5 years to maturity) Book Value Fair Value $230,000 $220,000 $300,000 $280,000 $1,250,000 $1,450,000 $520,000 $560,000 On February 1, 2022, Pretty sold land to Sweety at a gain of $32,000. At December 31, 2021, Pretty had $62,000 of inventory purchased from Sweety. During 2022, Sweety sold $345,000 of inventory to Pretty and $58,000 of these sales remained in Pretty's inventory at December 31, 2022. At December 31, 2021, Sweety had $24,000 of inventory purchased from Pretty during 2021. During 2022 Pretty sold $220,000 of inventory to Sweety and $29,000 of these sales remained in Sweety's inventory at December 31, 2022. All sales of both companies are priced to provide the seller with a gross profit of 40%. The goodwill associated with this business combination was tested for impairment on December 31, DIT: 19,440 7,391 MAI tv 2 A W 4 Finish attempt... Alternating Row Color Row & Column Size NEW W