Reference no: EM133175018

Question - Shell Company, an 85% owned subsidiary of Plaster Company, sells merchandise to Plaster Company at a markup of 20% of selling price. During 2019 and 2020, intercompany sales amounted to $442,500 and $386,250, respectively. At the end of 2019, Plaster had one-half of the goods that it purchased that year from Shell in its ending inventory. Plaster's 2020 ending inventory contained one-fifth of that year's purchases from Shell. There were no intercompany sales prior to 2019.

Plaster had net income in 2019 of $750,000 from its own operations and in 2020 its independent income was $780,000. Shell reported net income of $322,500 and $335,400 for 2019 and 2020, respectively.

Required - Prepare in general journal form all entries necessary on the consolidated financial statement work-papers to eliminate the effects of the intercompany sales for each of the years 2019 and 2020.

Calculate the amount of non-controlling interest to be deducted from consolidated income in the consolidated income statement for 2020.

Calculate controlling interest in consolidated income for 2020.