Reference no: EM132770929
Protrade Corporation acquired 70 percent of the outstanding voting stock of Seacraft Company on January 1, 2020, for $416,500 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $595,000, and the fair value of the 30 percent noncontrolling interest was $178,500. No excess fair value over book value amortization accompanied the acquisition.
The following selected account balances are from the individual financial records of these two companies as of December 31, 2021:
Protrade Seacraft
Sales $710,000 $430,000
Cost of goods sold 325,000 232,000
Operating expenses 157,000 112,000
Retained earnings, 1/1/21 810,000 250,000
Inventory 353,000 117,000
Buildings (net) 365,000 164,000
Investment income Not given 0
Each of the following problems is an independent situation:
a Assume that Protrade sells Seacraft inventory at a markup equal to 60 percent of cost. Intra-entity transfers were $97,000 in 2020 and $117,000 in 2021. Of this inventory, Seacraft retained and then sold $35,000 of the 2020 transfers in 2021 and held $49,000 of the 2021 transfers until 2022.
Problem 1: Determine balances for the following items that would appear on consolidated financial statements for 2021:
- Cost of Goods Sold
- Inventory
- Net Income Attributable to Noncontrolling Interest
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