Determine the balances of cost of goods sold

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Several years ago Polar Inc. purchased an 80% interest in Icecap Co. The book values of Icecap's asset and liability accounts at that time were considered to be equal to their fair values. Polar paid an amount corresponding to the underlying book value of Icecap so that no allocations or goodwill resulted from the purchase price. The following selected account balances were from the individual financial records of these two companies as of December 31, 2009: Assume that Polar sold inventory to Icecap at a markup equal to 40% of cost. Intercompany transfers were $126,000 in 2008 and $154,000 in 2009. Of this inventory, $39,200 of the 2008 transfers were retained and then sold by Icecap in 2009 while $58,800 of the 2009 transfers were held until 2010.

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Question 1: On the consolidated financial statements for 2009, determine the balances that would appear for the following accounts: Cost of Goods Sold, Inventory and Non-controlling Interest in Subsidiary's Net Income. (If you use a gross profit percentage, do not round the calculation.)

Reference no: EM132448963

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