7-13 - E7-13 Intercompany Sales 2004 180,000 H-S-120,000...

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E7-13 Intercompany Sales 180,000 2004: H -----------------S -120,000 EI:45,000 EIP: 45,000 x 60/180 = 15,000 2005: BIP 15,000 135,000 H ----------------------------S 90,000 EI:30,000 EIP: 30,000 x 45/135 = 10,000 280,000 140,000 H -------------------------- S EI:110,000 EIP: 110,000 x 140/280 = 55,000 a. Consolidated net income for 20X4: Operating income of Hollow Corporation $160,000 Net income of Surg Corporation 90,000 $250,000 Less: Unrealized profit — Surg Corporation (15,000) Income to noncontrolling interest ($90,000 - $15,000) x .30 (22,500 ) Consolidated net income $212,500 b. Inventory balance, December 31, 20X5: Inventory reported by Hollow Corporation $ 30,000 Unrealized profit on books of Surg Corporation ($135,000 - $90,000) x ($30,000/$135,000) (10,000 ) $20,000 Inventory reported by Surg Corporation $110,000 Unrealized profit on books of Hollow Corporation ($280,000 - $140,000) x ($110,000/$280,000) (55,000 ) 55,000
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