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

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Unformatted text preview: E7-13 Intercompany Sales 2004: 180,000 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 = 10,000 140,000 280,000 H --------------------------S EI:110,000 EIP: 110,000 x 140/280 = 55,000 a. Consolidated net income for 20X4: Operating income of Hollow Corporation Net income of Surg Corporation Less: Unrealized profit -- Surg Corporation Income to noncontrolling interest ($90,000 - $15,000) x .30 Consolidated net income $160,000 90,000 $250,000 (15,000) (22,500) $212,500 b. Inventory balance, December 31, 20X5: Inventory reported by Hollow Corporation Unrealized profit on books of Surg Corporation ($135,000 - $90,000) x ($30,000/$135,000) Inventory reported by Surg Corporation Unrealized profit on books of Hollow Corporation ($280,000 - $140,000) x ($110,000/$280,000) Inventory, December 31, 20X5 $ 30,000 (10,000) $110,000 (55,000) 55,000 $75,000 $20,000 c. Consolidated cost of goods sold for 20X5: CGS on sale of inventory on hand January 1, 20X5 $45,000 x ($120,000 / $180,000) CGS on items purchased from Surg in 20X5 ($135,000 - $30,000) x ($90,000 / $135,000) CGS on items purchased from Hollow in 20X5 $ 30,000 70,000 ($280,000 - $110,000) x ($140,000 / $280,000) Total cost of goods sold d. Consolidated net income for 20X5: Operating income of Hollow Corporation Unrealized inventory profit -- Hollow Corporation Hollow's confirmed NI Operating income of Surg Add: Inventory profit of prior year realized in 20X5 Less: Unrealized inventory profit Surg's confirmed net income Income to noncontrolling interest ($85,000 + $15,000 - $10,000) x .30 Consolidated net income $220,000 (55,000) 85,000 $185,000 $165,000 85,000 15,000 (10,000) 90,000 (27,000) (63,000) $228,000 ...
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This note was uploaded on 04/18/2008 for the course ACCT cost taught by Professor Staff during the Spring '08 term at Oklahoma State.

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

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