Following are several figures reported for Preston and Sanchez as of December 31, 2011:
| Preston | Sanchez |
Inventory | $400,000 | $200,000 |
Sales | 800,000 | 600,000 |
Investment income | not given |
|
Cost of goods sold | 400,000 | 300,000 |
Operating expenses | 180,000 | 250,000 |
Preston acquired 70 percent of Sanchez in January 2010. In allocating the newly acquired subsidiary’s fair value at the acquisition date, Preston noted that Sanchez having developed a customer list worth $65,000 unrecorded on its accounting records and having a five-year remaining life. Any remaining excess fair value over Sanchez’s book value was attributed to goodwill. During 2011, Sanchez sells inventory costing $120,000 to Preston for $160,000. Of this amount, 20 percent remains unsold in Preston’s warehouse at year-end. For Preston’s consolidated reports, determine the following amounts to be reported for the current year.
Inventory
Sales
Cost of Goods Sold
Operating Expenses
Noncontrolling Interest in the Subsidiary’s Net Income
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