Reference no: EM133125646
Question - Ajax Corporation purchased at book value 70 percent of Beta Corporation's ownership and 90 percent of Cole Corporation's ownership in 20X5. At the dates the ownership was acquired, the fair value of the non-controlling interest was equal to a proportionate share of book value. There are frequent intercompany transfers among the companies. Activity relevant to 20X8 follows:
|
Year
|
Producer
|
Production Cost
|
Buyer
|
Transfer Price
|
Unsold at End of Year
|
Year Sold
|
|
20X7
|
Beta Corporation
|
$45,000
|
Ajax Corporation
|
$51,000
|
$17,000
|
20X8
|
|
20X7
|
Cole Corporation
|
84,000
|
Beta Corporation
|
96,000
|
24,000
|
20X8
|
|
20X8
|
Ajax Corporation
|
36,000
|
Beta Corporation
|
56,000
|
11,200
|
20X9
|
|
20X8
|
Beta Corporation
|
87,000
|
Cole Corporation
|
96,000
|
16,000
|
20X9
|
|
20X8
|
Cole Corporation
|
48,000
|
Ajax Corporation
|
66,000
|
22,000
|
20X9
|
For the year ended December 31, 20X8, Ajax reported $83,000 of income from its separate operations (excluding income from intercorporate investments), Beta reported net income of $37,500, and Cole reported net income of $28,000. (do not round intermediate calculations)
Required -
a. Compute the amount to be reported as consolidated net income for 20X8.
b. Compute the amount to be reported as inventory in the December 31,20X8, consolidated balance sheet for the preceding items.
c. Compute the amount to be reported as income assigned to non-controlling shareholders in the 20X8 consolidated income statement.