Question

On January 1, 2018, Sledge had common stock of $150,000 and retained earnings of $290,000. During that year, Sledge reported sales of $160,000, cost of goods sold of $85,000, and operating expenses of $43,000. On January 1, 2016, Percy, Inc., acquired 90 percent of Sledge's outstanding voting stock. At that date, $63,000 of the acquisition-date fair value was assigned to unrecorded contracts (with a 20-year life) and $23,000 to an undervalued building (with a 10-year remaining life). In 2017, Sledge sold inventory costing $10,800 to Percy for $18,000. Of this merchandise, Percy continued to hold $8,000 at year-end. During 2018, Sledge transferred inventory costing $11,500 to Percy for $23,000. Percy still held half of these items at year-end. On January 1, 2017, Percy sold equipment to Sledge for $13,500. This asset originally cost $19,000 but had a January 1, 2017, book value of $9,600. At the time of transfer, the equipment's remaining life was estimated to be five years. Percy has properly applied the equity method to the investment in Sledge. a. Prepare worksheet entries to consolidate these two companies as of December 31, 2018. b. Compute the net income attributable to the noncontrolling interest for 2018. Complete this question by entering your answers in the tabs below Required A Required B Prepare worksheet entries to consolidate these two companies as of December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list 1 Prepare Entry *G to remove the intra-entity gross profit from the beginning account balances. 2 Prepare Entry TA to adjust the equipment balance to the inning original cost and to adjust the accumulated depreciation to the consolidated January 1, 2018 balance 3 Prepare Entry S to eliminate the subsidiary's stockholders' equity accounts and to recognize the noncontrolling interest balance as of January 1, 2018. Credit Prepare Entry A to recognize acquisition-date fair value allocations adjusted for 2 years of amortization. 4 5 Prepare Entry I to remove the parent's equity method lote:-journal entry has been entered Record entry Clear entry view consolidation entries 5 Prepare Entry I to remove the parent's equity method income. inning 6 Prepare Entry E to recognize 2018 excess amortization. 7 Prepare Entry TI to eliminate the intra-entity inventory tranfers during 2018. Credit 8 Prepare Entry G to remove the intra-entity gross profit from the ending account balances. 9 Prepare Entry ED to eliminate the excess depreciation on equipment recorded at transfer price. Note :-journal entry has been entered Record entry Clear entry view consolidation entries Required A Required B > a. Prepare worksheet entries to consolidate these two companies as of December 31, 2018. b. Compute the net income attributable to the noncontrolling interest for 2018. Complete this question by entering your answers in the tabs below. Required A Required B Compute the net income attributable to the noncontrolling interest for 2018 et income attributable to noncontrolling interest

Answer 1

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