Question

Problem 5-16 (LO 5-2,5-3, 5-5) Following are several figures reported for Allister and Barone as of December 31, 2018: Inventory Sales Investment income Cost of goods sold Operating expenses Allister Barone $ 480,000 $ 280,000 960,000 760,000 not given 480,000 380,000 220,000 290,000 Allister acquired 90 percent of Barone in January 2017. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $74,000 that was unrecorded on its accounting records and had a 5- year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2018, Barone sells inventory costing $128,000 to Allister for $176,000. Of this amount, 15 percent remains unsold in Allister's warehouse at year-end. Determine balances for the following items that would appear on Allister's consolidated financial statements for 2018: Amounts Inventory Sales Cost of goods sold Operating expenses Net income attributable to noncontrolling interest

Answer 1

Amount 48000 7200 480000 280000 -7200 7528001 Amount 1 Particulars 2 Inventory 3 Inventory Unsold @ end of the year 4 5 Inventory(Alister) 6 Inventory(Barone) 7 Inventory Unsold @ end of the year 8 Inventory 9 10 Particulars 11 Sales 12 Sales (Alister) 13 Sales (Barone) 14 Intra-Company Transfers 15 Sales 16 17 Particulars 18 Cost of Goods Sold 19 COGS (Alister) 20 COGS(Barone) 21 Intra-Company Transfers 22 Inventory Unsold @end of the year 23 Cost of Goods Sold 24 9600001 760000 -1760001 1544000 Amount 480000 380000 -176000 7200 691200

Amount 220000 290000 14800 524800 25 Particulars 26 Operating Expenses 27 Expenses (Alister) 28 Expenses(Barone) 29 Ammortization Expenses 30 Operating Expenses 31 32 Particulars 33 Net Income attributable to Non Controllable Interest 34 Net Income (Barone) 35 Inventory Unsold @ end of the year 36 Ammortization Expenses 37 38 Non Controlling Interest 39 Net Income attributable to Non Controllable Interest Amount 90000 -7200 -14800 68000 10% 6800

A 1 Particulars 2 Inventory 3 Inventory Unsold @ end of the year B Amount =176000-128000 =+B2*15% 4 480000 280000 --B3 =SUM(B5:37) Amount 5 Inventory Alister) 6 Inventory(Barone) 7 Inventory Unsold @ end of the year 8 Inventory 9 10 Particulars 11 Sales 12 Sales (Alister) 13 Sales (Barone) 14 Intra-Company Transfers 15 Sales 16 17 Particulars 18 Cost of Goods Sold 19 COGS (Alister) 20 COGS(Barone) 21 Intra-Company Transfers 22 Inventory Unsold @ end of the year 23 Cost of Goods Sold 24 960000 760000 -176000 =SUM(B12:B14) Amount 480000 380000 -176000 7200 =SUM(B19:B22)

25 Particulars Amount 26 Operating Expenses 27 Expenses (Alister) 220000 28 Expenses(Barone) 290000 29 Ammortization Expenses =74000/5 30 Operating Expenses =SUM(B27:B29) 31 32 Particulars Amount 33 Net Income attributable to Non Controllable Interest 34 Net Income (Barone) =760000-380000-290000 35 Inventory Unsold @ end of the year - 7200 36 Ammortization Expenses -14800 37 =SUM(B34:B36) 38 Non Controlling Interest 39 Net Income attributable to Non Controllable Interest |=+B37*B38 40