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Penguin Corporation acquired 70 percent of the out...

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Penguin Corporation acquired 70 percent of the outstanding voting stock of Snow Company on January 1, 2012, for $430,500 in cash and other consideration. At the acquisition date, Penguin assessed Snow?s identifiable assets and liabilities at a collective net fair value of $745,000 and the fair value of the 30 percent noncontrolling interest was $184,500. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the individual financial records of these two companies as of December 31, 2013: Penguin Snow Sales $ 860,000 $ 580,000 Cost of goods sold 400,000 307,000 Operating expenses 172,000 127,000 Retained earnings, 1/1/13 960,000 400,000 Inventory 368,000 132,000 Buildings (net) 380,000 179,000 Investment income Not given 0 ________________________________________ Each of the following problems is an independent situation a. Assume that Penguin sells Snow inventory at a markup equal to 60 percent of cost. Intra-entity transfers were $112,000 in 2012 and $132,000 in 2013. Of this inventory, Snow retained and then sold $50,000 of the 2012 transfers in 2013 and held $64,000 of the 2013 transfers until 2014. On consolidated financial statements for 2013, determine the balances that would appear for the following accounts: Cost of Goods Sold = ? Inventory = ? Noncontrolling interest in subsidiary?s net income = ?

 

Paper#7687 | Written in 18-Jul-2015

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