Advanced Accounting
AmazingExpertBaxter, Inc., owns 90 percent of Wisconsin, Inc., and 20 percent of Cleveland Company. Wisconsin, in turn, holds 60 percent of Cleveland%u2019s outstanding stock. No excess amortization resulted from these acquisitions. During the current year, Cleveland sold a variety of inventory items to Wisconsin for $40,000 although the original cost was $30,000. Of this total, Wisconsin still held $12,000 in inventory (at transfer price) at year-end.
During this same period, Wisconsin sold merchandise to Baxter for $100,000 although the original cost was only $70,000. At year-end, $40,000 of these goods (at the transfer price) was still on hand. |
The initial value method was used to record each of these investments. None of the companies holds any other investments. |
| Baxter | Wisconsin | Cleveland | |||||||
| Sales | $ | (1,000,000 | ) | $ | (450,000 | ) | $ | (280,000 | ) |
| Cost of goods sold | 670,000 | 280,000 | 190,000 | ||||||
| Expenses | 110,000 | 60,000 | 30,000 | ||||||
| Dividend income: | |||||||||
| Wisconsin | (36,000 | ) | 0 | 0 | |||||
| Cleveland | (4,000 | ) | (12,000 | ) | 0 | ||||
| Net income | $ | (260,000 | ) | $ | (122,000 | ) | $ | (60,000 | ) |
Note: Parentheses indicate a credit balance.
Using the above separate income statements, determine the figures that would appear on a consolidated income statement. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values.) |
| Sales | $ | |
| Cost of goods sold | $ | |
| Expenses | $ | |
| Dividend income | $ | |
| Consolidated net income | $ | |
| Noncontrolling interests in subsidiaries' income | $ | |
| Controlling interest in consolidated net income | $ |
11 years ago
Purchase the answer to view it
statement_for_calculating_rate_of_profit.xlsx
