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Workpaper Journal Entries LO 6 LO 8 Pico Company, a truck manufacturer, owns 90% of the voting stock of Seward Company. On January 1, 2014, Pico...

Workpaper Journal Entries LO 6 LO 8

Pico Company, a truck manufacturer, owns 90% of the voting stock of Seward Company. On January 1, 2014, Pico Company sold trucks to Seward Company for $350,000. The trucks, which represented inventory to Pico Company, had a cost to Pico Company of $260,000. The management of Seward Company estimated that the trucks had a useful life of six years from the date of purchase. Seward Company uses the straight-line method to depreciate its capital assets.

In 2014, Pico Company reported $600,000 in net income from its independent operations (including sales to affiliates but excluding dividend or equity income from subsidiary), and Seward Company reported $200,000 in net income from its operations.

Required:

A. Prepareingeneraljournalformtheworkpaperentriesnecessarybecauseoftheintercompanysalesin:

(1) The consolidated financial statements workpaper for the year ended December 31, 2014.

(2) The consolidated financial statements workpaper for the year ended December 31, 2015 .

B. CalculatecontrollinginterestinconsolidatednetincomefortheyearendedDecember31,2014.

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