Powell Company owns 80% of the outstanding common stock of Sullivan Company. On June 30, 2014, Sullivan Company sold equipment to Powell Company for $500,000. The equipment cost Sullivan Company $780,000 and had accumulated depreciation of $400,000 on the date of the sale. The management of Powell Company estimated that the equipment had a remaining useful life of four years from June 30, 2014. In 2015, Powell Company reported $300,000 and Sullivan Company reported $200,000 in net income from their independent operations (including sales to affiliates but excluding dividend or equity income from subsidiary).
Required:
A. Prepare in general journal form the workpaper entries necessary because of the intercompany sale of equipment
in:
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. Calculate the balances to be reported in the consolidated income statement for the year ended December 31, 2015, for the following items:
1. Consolidated income.
2. Noncontrolling interest in consolidated income.
3. Controlling interest in consolidated income.
Answers: 2
Another question on Business
Business, 21.06.2019 19:40
Anew equipment has been proposed by engineers to increase the productivity of a certain manual welding operation. the investment cost is $25,000, and the equipment will have a market value of $5,000 at the end of a study period of five years. increased productivity attributable to the equipment will amount to $10,000 per year after operating costs have been subtracted from the revenue generated by the additional production. if marr is 10%, is investing in this equipment feasible? use annual worth method.
Answers: 3
Business, 21.06.2019 23:00
Ajustification for job training programs is that they improve worker productivity. suppose that you are asked to evaluate whether more job training makes workers more productive. however, rather than having data on individual workers, you have access to data on manufacturing firms in ohio. in particu- lar, for each firm, you have information on hours of job training per worker (training) and number of nondefective items produced per worker hour (output). (i) carefully state the ceteris paribus thought experiment underlying this policy question. (ii) does it seem likely that a firm’s decision to train its workers will be independent of worker characteristics? what are some of those measurable and unmeasurable worker characteristics? (iii) name a factor other than worker characteristics that can affect worker productivity. (iv) if you find a positive correlation between output and training, would you have convincingly established that job training makes workers more productive? explain.
Answers: 2
Business, 22.06.2019 08:30
Most angel investors expect a return on investment of question options: 20% to 25% over 5 years. 15% to 20% over 5 years. 75% over 10 years. 100% over 5 years.
Answers: 1
Business, 22.06.2019 10:10
conquest, inc. produces a special kind of light-weight, recreational vehicle that has a unique design. it allows the company to follow a cost-plus pricing strategy. it has $9,000,000 of average assets, and the desired profit is a 10% return on assets. assume all products produced are sold. additional data are as follows: sales volume 1000 units per year; variable costs $1000 per unit; fixed costs $4,000,000 per year; using the cost-plus pricing approach, what should be the sales price per unit?
Answers: 2
You know the right answer?
Powell Company owns 80% of the outstanding common stock of Sullivan Company. On June 30, 2014, Sulli...
Questions
Mathematics, 11.03.2020 19:55
Biology, 11.03.2020 19:55
Mathematics, 11.03.2020 19:56
