Pistol Corporation acquired 70 percent of Scope Corporation’s voting stock on May 18, 20X1. The companies reported the following data with respect to intercompany sales in 20X4 and 20X5: Pistol Corporation acquired 70 percent of Scope Corporation’s voting stock on May -1
Pistol reported operating income (excluding income from its investment in Scope) of $160,000 and $220,000 in 20X4 and 20X5, respectively. Scope reported net income of $90,000 and $85,000 in 20X4 and 20X5, respectively.
Required:
a. Compute consolidated net income for 20X4.
b. Compute the inventory balance reported in the consolidated balance sheet at December 31, 20X5, for the transactions shown.
c. Compute the amount included in consolidated cost of goods sold for 20X5 relating to the transactions shown.
d. Compute the amount of income assigned to the controlling interest in the 20X5 consolidated income statement.