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On January 1, 2012, Doone Corporation acquired...




On January 1, 2012, Doone Corporation acquired 70 percent of the outstanding voting stock of Rockne Company for $546,000 consideration. At the acquisition date, the fair value of the 30 percent noncontrolling interest was $234,000 and Rockne?s assets and liabilities had a collective net fair value of $780,000. Doone uses the equity method in its internal records to account for its investment in Rockne. Rockne reports net income of $280,000 in 2013. Since being acquired, Rockne has regularly supplied inventory to Doone at 25 percent more than cost. Sales to Doone amounted to $340,000 in 2012 and $440,000 in 2013. Approximately 40 percent of the inventory purchased during any one year is not used until the following year. a. What is the noncontrolling interest?s share of Rockne?s 2013 income? Noncontrolling interest's share $ b. Prepare Doone?s 2013 consolidation entries required by the intra-entity inventory transfers. Event General Journal Debit Credit Entry *G (Click to select)CashSales revenueRetained earnings, Jan. 1 (subsidiary)Cost of goods soldInterest expenseInventorySalesInvestment (Click to select)Cost of goods soldInventorySalesInvestmentCashSales revenueRetained earnings, Jan. 1 (subsidiary)Interest expense Entry Tl (Click to select)Dividends paidInventoryRetained earnings, Jan. 1 (subsidiary)InvestmentInterest expenseCashSalesCost of goods sold (Click to select)Sales revenueInterest expenseCost of goods soldRetained earnings, Jan. 1 (subsidiary)InventoryDividends paidInvestmentCash Entry G (Click to select)Sales revenueSalesCashInterest expenseInvestmentCost of goods soldRetained earnings, Jan. 1 (subsidiary)Inventory (Click to select)SalesRetained earnings, Jan. 1 (subsidiary)Cost of goods soldInventoryInterest expenseCashSales revenueInvestment


Paper#6211 | Written in 18-Jul-2015

Price : $25