Reference no: EM132823111
Question - Plug Products owns 80 percent of the stock of Spark Filter Company, which it acquired at underlying book value on August 30, 20X6. At that date, the fair value of the non-controlling interest was equal to 20 percent of the book value of Spark Filter. Summarized trial balance data for the two companies as of December 31, 20X8, are as follows:
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Plug Products
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Spark Filter Company
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Debit
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Credit
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Debit
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Credit
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Cash and Accounts Receivable
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$156,000
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$109,000
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Inventory
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221,000
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113,000
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Buildings & Equipment (net)
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274,000
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184,000
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Investment in Spark Filter Company
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253,333
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Cost of Goods Sold
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166,000
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131,000
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Depreciation Expense
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50,000
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40,000
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Current Liabilities
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$177,333
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$75,333
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Common Stock
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186,000
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82,000
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Retained Earnings
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467,000
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213,000
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Sales
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256,667
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206,667
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Income from Spark Filter Company
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33,333
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Total
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$1,120,333
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$1,120,333
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$577,000
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$577,000
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On January 1, 20X8, Plug's inventory contained filters purchased for $65,000 from Spark Filter, which had produced the filters for $45,000. In 20X8, Spark Filter spent $105,000 to produce additional filters, which it sold to Plug for $151,667. By December 31, 20X8, Plug had sold all filters that had been on hand January 1, 20X8, but continued to hold in inventory $45,500 of the 20X8 purchase from Spark Filter.
Required - Compute consolidated net income and income assigned to the controlling interest in the 20X8 consolidated income statement.
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