Use the following data for problems 1015 on january 1

Use the following data for Problems 10–15:
On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000
cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of
$65,000. On January 1, Suarez possessed equipment (5-year remaining life) that was under-
valued on its books by $25,000. Suarez also had developed several secret formulas that Jarel
assessed at $50,000. These formulas, although not recorded on Suarez’s financial records, were
estimated to have a 20-year future life.
As of December 31, the financial statements appeared as follows:
LO 5-7
Jarel Suarez
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (300,000) $(200,000)
Cost of goods sold. . . . . . . . . . . . . . . . . . . . . . . . . . . 140,000 80,000
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 10,000
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (140,000 ) $(110,000 )
Retained earnings, 1/1 . . . . . . . . . . . . . . . . . . . . . . . . $ (300,000) $(150,000)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (140,000) (110,000)
Dividends declared. . . . . . . . . . . . . . . . . . . . . . . . . . . –0– –0–
Retained earnings, 12/31 . . . . . . . . . . . . . . . . . . . . $ (440,000 ) $(260,000 )
Cash and receivables . . . . . . . . . . . . . . . . . . . . . . . . . $ 210,000 $ 90,000
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000 110,000
Investment in Suarez . . . . . . . . . . . . . . . . . . . . . . . . . 260,000 –0–
Equipment (net). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440,000 300,000
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,060,000 $ 500,000
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (420,000) $(140,000)
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (200,000) (100,000)
Retained earnings, 12/31 . . . . . . . . . . . . . . . . . . . . . . (440,000) (260,000)
Total liabilities and equities. . . . . . . . . . . . . . . . . . . $(1,060,000 ) $(500,000 )
During the year, Jarel bought inventory for $80,000 and sold it to Suarez for $100,000. Of
these goods, Suarez still owns 60 percent on December 31.
10. What is the total of consolidated revenues?
a. $500,000.
b. $460,000.
c. $420,000.
d. $400,000.
11. What is the total of consolidated cost of goods sold?
a. $140,000.
b. $152,000.
c. $132,000.
d. $145,000.
12. What is the total of consolidated expenses?
a. $30,000.
b. $36,000.
c. $37,500.
d. $39,000.
LO 5-2
LO 5-2, 5-3
LO 3-1
(Chapter 3)

Consolidated Financial Statements—Intra-Entity Asset Transactions 239
13. What is the consolidated total of noncontrolling interest appearing on the balance sheet?
a. $85,500.
b. $83,100.
c. $87,000.
d. $70,500.
14. What is the consolidated total for equipment (net) at December 31?
a. $740,000.
b. $756,000.
c. $760,000.
d. $765,000.
15. What is the consolidated total for inventory at December 31?
a. $240,000.
b. $248,000.
c. $250,000.
d. $260,000.
16. Following are several figures reported for Allister and Barone as of December 31, 2015:
LO 5-5
LO 5-7
LO 5-3
LO 5-2, 5-3, 5-5
Net Income
Dividends
Declared Inventory Purchases from Corgan
2014 $150,000 $35,000 $100,000
2015 130,000 45,000 120,000
Allister Barone
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 500,000 $300,000
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 800,000
Investment income. . . . . . . . . . . . . . . . . . . . . . . . . . . . not given
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000 400,000
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 230,000 300,000
Allister acquired 90 percent of Barone in January 2014. In allocating the newly acquired
subsidiary’s fair value at the acquisition date, Allister noted that Barone had developed a
customer list worth $78,000 that was unrecorded on its accounting records and had a 4-year
remaining life. Any remaining excess fair value over Barone’s book value was attributed to
goodwill. During 2015, Barone sells inventory costing $130,000 to Allister for $180,000. Of
this amount, 10 percent remains unsold in Allister’s warehouse at year-end.
Determine balances for the following items that would appear on Allister’s consolidated
financial statements for 2015:
Inventory
Sales
Cost of Goods Sold
Operating Expenses
Net Income Attributable to Noncontrolling Interest
17. On January 1, 2014, Corgan Company acquired 80 percent of the outstanding voting stock
of Smashing, Inc., for a total of $980,000 in cash and other consideration. At the acquisition
date, Smashing had common stock of $700,000, retained earnings of $250,000, and a noncon-
trolling interest fair value of $245,000. Corgan attributed the excess of fair value over Smash-