Reference no: EM132653490

Question - XYZ acquired 60% of Water company on January 1 ,2019. At the time of acquisition, total excess fair value was attributed to customer base and amortized at a rate of $15,000 per year. During 2019, XYZ sold goods with a cost of $595,000 for $850,000 to Water. Water still owned 10% of the goods at the end of the year. In 2020, XYZ sold goods with a cost of $800,000 to Water for $1,000,000, and Surfung still owned 28% of the goods at year-end.

Balances of 2020:

Sales XYZ $6,000,000 Water $2,800,000

COGS $4,200,000 $1,700,000

Net Income Not given $1,100,000

Required -

A. Compute the consolidated sales for 2020?

B. Compute the consolidated cost of goods for 2020?

C. Compute the noncontroling interest in Water's income for 2020?

D. Assume that the intra-entity sales were upstream (assume that it was Water who sold inventory to XYZ), compute the noncontroling interest in Water's income for 2020.