Maurice Tutor
$15/per page/Negotiable
Baxter, Inc., owns 90 percent of Wisconsin, Inc., and 20 percent of Cleveland Company. Wisconsin, in turn, holds 60 percent of Cleveland%u2019s outstanding stock. No excess amortization resulted from these acquisitions. During the current year, Cleveland sold a variety of inventory items to Wisconsin for $40,000 although the original cost was $30,000. Of this total, Wisconsin still held $12,000 in inventory (at transfer price) at year-end.
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During this same period, Wisconsin sold merchandise to Baxter for $100,000 although the original cost was only $70,000. At year-end, $40,000 of these goods (at the transfer price) was still on hand. |
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The initial value method was used to record each of these investments. None of the companies holds any other investments. |
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| Â | Baxter | Wisconsin | Cleveland | ||||||
| Sales | $ | (1,000,000 | ) | $ | (450,000 | ) | $ | (280,000 | ) |
| Cost of goods sold | Â | 670,000 | Â | Â | 280,000 | Â | Â | 190,000 | Â |
| Expenses | Â | 110,000 | Â | Â | 60,000 | Â | Â | 30,000 | Â |
| Dividend income: | Â | Â | Â | Â | Â | Â | Â | Â | Â |
| Wisconsin | Â | (36,000 | ) | Â | 0 | Â | Â | 0 | Â |
| Cleveland | Â | (4,000 | ) | Â | (12,000 | ) | Â | 0 | Â |
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| Net income | $ | (260,000 | ) | $ | (122,000 | ) | $ | (60,000 | ) |
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Note: Parentheses indicate a credit balance.
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Using the above separate income statements, determine the figures that would appear on a consolidated income statement. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values.) |
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| Â | Â | Â |
| Sales | Â | $ |
| Cost of goods sold | Â | $ |
| Expenses | Â | $ |
| Dividend income | Â | $ |
| Consolidated net income | Â | $ |
| Noncontrolling interests in subsidiaries' income | Â | $ |
| Controlling interest in consolidated net income | Â | $ |
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