Exercise

6-1

Step 1 of 1

P Company owns 80 percent of the outstanding stock of S Company.

Net income of S Company during 2011 was 525,000.

Company declared no dividends during year 2011.

Inventory of S Company included 487,500 in unrealized profit on purchases from P Company.

Total intercompany sales were 2,700,000.

All consolidated workpaper entries required at the year of the year to eliminate the effects of the year 2011 intercompany sales are as follows:

6-9

Step 1 of 3

A corrected consolidated income statement of P Company and S Company for the year ended December 31, 2012 is as follows:

Step 2 of 3

(a)

Cost of goods sold is calculated as follows:

Step 3 of 3

(b)

Noncontrolling interest in consolidated income as follows:

Problem

6-4

Step 1 of 4

(A)

Prepare Journal...