Chapter 6 E6-11 Upstream Sale of Equipment in Prior Period
Baywatchs share of Tubberware's realized income
Baywatch's Separate operating income realized
($100,000 + 2,500)
Baywatch's share of Tubberware's income
($40,000 x 80%)
Consolidated Net Income
The amount would change by 500 greater
Retained Earnings, Jan 1
Baywatch Industries has owned 80 percent of Tubberware
Coporation for many years.
On Januarary 1, 20X6,
paid Tubberware $270,000 to acquire equipment that Tubberware
had purchased on January 1 20X3, for $300,000.
The Eq is
expected to have no scrap value and is depreciated over a 15 year
Baywaytch reported operating earnings of $100,000 for 20X8 and
paid dividends of $40,000.
Tubberware reported net income of
$40,000 and paid dividends of $20,000 in 20X8.