Solution-Shine corporation purchased 30 percent of the

Shine corporation purchased 30 percent of the common stock

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Reference no: EM13373221

Shine Corporation purchased 30 percent of the common stock of Ash Corporation on January 1, 2007, at $28,000 in excess of underlying book value. The excess is attributable to equipment with a remaining useful life of 2 years. The companies reported the following operating results and dividends for the three years following the date of purchase:

	Shine		Ash
Year	Operating Income	Dividends	Net Income	Dividends
2007	1,000,000	130,000	400,000	40,000
2008	960,000	140,000	300,000	40,000
2009	1,200,000	140,000	500,000	22,000

Barnes Company acquired 80% of the outstanding voting stock of Dean Company on January 1, 2008. During 2008 Dean Company sold inventory costing $50,000 to Barnes Company for $80,000. Barnes Company continued to hold the inventory at December 31, 2008. Also during 2008, Barnes Company sold merchandise costing $400,000 to nonaffiliates for $600,000, and on its separate balance sheet reported total inventory at year end of $140,000. In its separate financial statements, Dean Company reported total sales and cost of goods sold of $350,000 and $220,000, respectively, for 2008 and ending inventory of $50,000.

Required: Based on the above information, compute the amounts that should appear in the consolidated financial statements prepared for Barnes Company and it subsidiary, Dean Company, at year end for the following items: 1) sales; 2) cost of goods sold; 3) gross profit on sales; 4) inventory.

Reference no: EM13373221

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Shine corporation purchased 30 percent of the common stock

Reference no: EM13373221

Reference no: EM13373221

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