Travis Company acquired an 80 interest in Mountain Company on January 1, 2022 in exchange for...

 

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Travis Company acquired an 80 interest in Mountain Company on January 1, 2022 in exchange for various considerations totaling $800,000. At the acquisition date, the fair value of the NCI interest was $200,000. Mountain's book value of net assets on that date consisted of common stock of $290,000 and retained earnings of $510,000. Travis attributed the excess of fair value over Mountain's book value to undervalued equipment with a 10-year remaining life. Reported own net income for 2022 was $240,000 for Travis and $150,000 for Mountain. Travis distributed $80,000 in dividends during 2022; Mountain paid $20,000. Mountain regularly sells inventory to Travis at a 20 percent gross profit rate. Travis consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the two years after this business combination were the following: Reported own net income for 2023 was $340,000 for Travis and $200,000 for Mountain. Travis distributed $90,000 in dividends during 2023; Mountain paid $30,000. The following selected account balances are from the individual financial records of these two companies as of December 31, 2023: 1. Determine the amount of intra-entity profit remains in Travis's inventory at the end of year 2022. [a] 2. What was the balance of Investment in Mountain on Travis's book as of December 31, 2022? [bl 3. Determine the amount of intra-entity profit remains in Travis's inventory at the end of year 2023. [cl 4. What is the amount of Equity in Mountain Earnings for year 2023? [d] 5. What is the amount of noncontrolling interest net income for 2023? [e] 6. Determine the consolidated balance of sales for 2023. 7. Determine the consolidated balance of cost of goods sold for 2023. [g] 8. Determine the consolidated balance of operating expenses for 2023. [h] 9. Determine the consolidated balance of inventory as of December 31, 2023. [i] Travis Company acquired an 80 interest in Mountain Company on January 1, 2022 in exchange for various considerations totaling $800,000. At the acquisition date, the fair value of the NCI interest was $200,000. Mountain's book value of net assets on that date consisted of common stock of $290,000 and retained earnings of $510,000. Travis attributed the excess of fair value over Mountain's book value to undervalued equipment with a 10-year remaining life. Reported own net income for 2022 was $240,000 for Travis and $150,000 for Mountain. Travis distributed $80,000 in dividends during 2022; Mountain paid $20,000. Mountain regularly sells inventory to Travis at a 20 percent gross profit rate. Travis consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the two years after this business combination were the following: Reported own net income for 2023 was $340,000 for Travis and $200,000 for Mountain. Travis distributed $90,000 in dividends during 2023; Mountain paid $30,000. The following selected account balances are from the individual financial records of these two companies as of December 31, 2023: 1. Determine the amount of intra-entity profit remains in Travis's inventory at the end of year 2022. [a] 2. What was the balance of Investment in Mountain on Travis's book as of December 31, 2022? [bl 3. Determine the amount of intra-entity profit remains in Travis's inventory at the end of year 2023. [cl 4. What is the amount of Equity in Mountain Earnings for year 2023? [d] 5. What is the amount of noncontrolling interest net income for 2023? [e] 6. Determine the consolidated balance of sales for 2023. 7. Determine the consolidated balance of cost of goods sold for 2023. [g] 8. Determine the consolidated balance of operating expenses for 2023. [h] 9. Determine the consolidated balance of inventory as of December 31, 2023. [i]