Anchovy acquired 90 percent of Yelton on January 1, 2009. Of Yelton’s total acquisition-date fair value, $60,000 was allocated to undervalued equipment (with a 10-year life) and $80,000 was attributed to franchises (to be written off over a 20-year period).
Since the takeover, Yelton has transferred inventory to its parent as follows:
Year | Cost | Transfer Price | Remaining at Year-End |
2009 | $20,000 | $ 50,000 | $20,000 (at transfer price) |
2010 | 49,000 | 70,000 | 30,000 (at transfer price) |
2011 | 50,000 | 100,000 | 40,000 (at transfer price) |
On January 1, 2010, Anchovy sold Yelton a building for $50,000 that had originally cost $70,000 but had only a $30,000 book value at the date of transfer. The building is estimated to have a five-year remaining life (straight-line depreciation is used with no salvage value).
Selected figures from the December 31, 2011, trial balances of these two companies are as follows:
| Anchovy | Yelton |
Sales | $600,000 | $500,000 |
Cost of goods sold | 400,000 | 260,000 |
Operating expenses | 120,000 | 80,000 |
Investment income | Not given | -0- |
Inventory | 220,000 | 80,000 |
Equipment (net) | 140,000 | 110,000 |
Buildings (net) | 350,000 | 190,000 |
Determine consolidated totals for each of these account balances.
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