Pet Corporation acquired an 80 percent interest in She Corporation on January 1, 2011, for $320,000, at which time She had capital stock of $200,000 outstanding and retained earnings of $100,000. The price paid reflected a $100,000 undervaluation of She’s plant and equipment. The plant and equipment had a remaining useful life of eight years when Pet acquired its interest. Separate and consolidated financial statements for Pet Corporation and its subsidiary, She Corporation, for the year ended December 31, 2013, are as follows:

She sells merchandise to Pet but never purchases from Pet. On January 1, 2013, She purchased $100,000 par of 10 percent Pet Corporation bonds for $106,000. These bonds mature on December 31, 2015, and She expects to hold the bonds until maturity. Both She and Pet use straight-line amortization. Interest is payable on December 31.
REQUIRED: Show computations for each of the following items:
1. The $3,000 loss in the consolidated income statement
2. The $230,000 consolidated sales
3. Consolidated cost of goods sold of $110,000
4. Intercompany profit in beginning inventories
5. Intercompany profit in ending inventories
6. Consolidated accounts receivable of $165,000
7. Noncontrolling interest share of $8,000 
8. Noncontrolling interest at December 31, 2013
9. Investment in She stock at December 31, 2012
10. Investment income account of $20,000 (Pet’sbooks)

 

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