Present consolidation entries related to intercompany sale

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Intercompany Sale of Services

Plastic Corporation purchased management consulting services from its 75 percent-owned sub- sidiary, Spoon Inc. During 20X3, Plastic paid Spoon $123,200 for its services. For the year 20X4, Spoon billed Plastic $138,700 for such services and collected all but $6,600 by year-end. Spoon's labor cost and other associated costs for the employees providing services to Plastic totaled $91,000 in 20X3 and $112,000 in 20X4. Plastic reported $2,342,000 of income from its own separate operations for 20X4, and Spoon reported net income of $631,000

Required

Problem a. Present all consolidation entries related to the intercompany sale of services that would be needed in the consolidation worksheet used to prepare a complete set of consolidated financial statements for 20X4.

Problem b. Compute consolidated net income for 20X4 and the amount of income assigned to the controlling interest

Reference no: EM132831297

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