Reference no: EM131661661

Question 1:

John and Sam provided the following information for 20X6:

- During 20X6, Sam sold goods to John for $560,000. As of December 31, 20X6, John still had 25% of the goods in its inventory. John paid the same price for the goods as Sam's other customers.

- During 20X6,John sold goods to Sam for $532,000. As of December 31, 20X6, Sam still had 20% of the goods in its inventory. Sam paid the same price for the goods as John's other customers.

- Sam's warehouse and equipment have remaining useful lives of 10 years and 5 years, respectively. Both Sam and John use straight-line amortization.

- Neither John nor Sam has disposed of or has written off any property, plant, or equipment.

- There has been no impairment of goodwill.

Required:

Prepare John's consolidated balance sheet, consolidated income statement, and consolidated statement of retained earnings for December 31 , 20X6.

Question 2:

John and Sam provided the following information for 20X7:

- All the goods that were in inventory at December 31, 20X6 were sold to third parties by Apri120X7.

- During 20X7, Sam sold goods to John for $425,600. The gross margin is unchanged from 20X6. At December 31, 20X7, John still had 50% of the goods in its inventory.

- At the beginning of December, John sold goods to Sam for $106,400. John's gross margin on this sale was 50%. By the end of the year, Sam had not sold any of these goods.

Required:

Calculate the following amounts for the year ended December 31, 20X7:

a. non-controlling interest in earnings that would appear on John's consolidated income statement.

b. non-controlling interest that would appear on John's consolidated balance sheet.

Attachment:- Appendix.rar