Question

Wren Corporation acquired 80% ownership of Arid Incorporated, at a time when Wren’s investment (using the equity method) and Arid’s book values were equal. During 2005, Wren sold goods to Arid for $200,000 making a gross profit percentage of 20%. Half of these goods remained unsold in Arid’s inventory at the end of the year. Income statement information for Wren and Arid for 2005 were as follows:

Wren Arid

Sales Revenue $1,000,000   $600,000
Cost of Goods Sold 500,000 400,000
Operating Expenses 500,000 80,000
Separate Incomes $250,000    $120,000

The 2005 consolidated income statement showed cost of goods sold of ________.

$720,000.
$880,000.
$900,000.
$920,000.

                                  
The 2005 consolidated income statement showed income from Arid of _________.
  
a.   $56,000.
b.   $76,000.
c.   $80,000.
d.   $96,000.

The 2005 consolidated income statement showed noncontrolling interest share of _______
  
a.   $ 2,000.
b.   $ 8,000.
c.   $20,000.
d.   $24,000.

Answer 1

Answer P. No.1 -> Woen Corporation acquired 80% ownership Anid Incorporated, at a time when Holen's Investment. of Ang 8(A) $ 780,000 500,000.00 400,000.00 Wren Cost of Goods sold Arid Cost of Goods sold lexio Cost of unsold goods (Purchased from heren) (100,000 X 80/100) (80,000.00) Consolidated income statement Cost of goods sold 820,000.00

P. 2 Ans 9 (6) $ 46,000 Share of talren profit 96,000.00 190,000 X 80 ). less & Intercompany profit on sales of goods lyin in closing stock (100,000 -80,000) 20,000.00 76,000.00 Ans 10) (d) $ 24,000 Non Controlling income = 190,000 X 30 %. Q4000 please, vode postinely.. Its help me a lot you. Thank