ACC440_TEAM_WEEK5 - Learning Team E6-11 Upstream Sale of...

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Learning Team 2/14/10 E6-11 Upstream Sale of Equipment in Prior Period Baywatch Industries purchased 80 percent ownership of Tubberware Corporation on Ja that Tubberware had purchased on January 1, 20X3, for $300,000. The equipment is ex Baywatch reported operating earnings of $100,000 for 20X8 and paid dividends of $40,0 Required a. Compute the amount reported as consolidated net income for 20X8. b. By what amount would consolidated net income change if the equipment sale had be c. Give the eliminating entry or entries required to eliminate the effects of the intercompa (a) Baywatch’s separate operating income Baywatch’s share of Tubberware’s realized income: [($40,000 + $2,500) x 80%] Consolidated net income (b) Baywatch’s separate operating income realized ($100,000 + $2,500) Baywatch’s share of Tubberware’s income ($40,000 x 80%) Consolidated net income (c) Retained Earnings, Jan. 1 ($25,000* x 80%) Noncontrolling Interest ($25,000 x 20%) Equipment ($300,000 - $270,000)
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This note was uploaded on 03/22/2010 for the course ACC ACC440 taught by Professor Wormer during the Spring '08 term at University of Phoenix.

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ACC440_TEAM_WEEK5 - Learning Team E6-11 Upstream Sale of...

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