Reference no: EM132344379

Question :

Table 1: Account Balances for Year Ending December 31, 2016

'Account	Panther	Staffer
'Sales	$        1,280,000	$           720,000
Cost of goods sold	$         580,000	$           394,000
Operating expenses	$         300,000	$           210,000
Retained earnings, January 1, 2016	$        1,480,000	$           360,000
Inventory	$         692,000	$           220,000
Buildings (net)	$         716,000	$           314,000
Investment income	Not provided	$                       -

Compute selected balances based on the following three different intra-entity asset transfer scenarios:

'1. Assume Panther sells Staffer inventory at a markup that equals 40% of the cost. In 2015, intra-entity 'transfers were $180,000. In 2016, they were $220,000. Of the inventory, Staffer retained, then sold, ¹$56,000 of the 2015 transfers in 2016 and held $84,000 of the 2016 transfers until 2017. Determine the account balances for the accounts shown below that will appear on 2016 consolidated financial statements:

• Cost of goods sold.
• Inventory.
• Noncontrolling interest in Staffer's net income.

You may use Table 2 below as a worksheet.

Table 2. Worksheet

Consolidated Cost of Goods Sold	Balance
Cost of goods sold	$974,000
Less unrealized profit	$(62,857)
Consolidated cost of goods sold	$911,143
Consolidated Inventory	Balance
Inventory balance	$912,000
Less unrealized profit	$(24,000)
Consolidated Inventory balance	$880,000