Consolidated statement items with equity methodPan Corporation purchased 80 percent of the...

Consolidated statement items with equity method

Pan Corporation purchased 80 percent of the outstanding voting common stock of Sal Corporation on January 2, 2011, for $600,000 cash. Sal’s balance sheets on this date and on December 31, 2011, are as follows:

ADDITIONAL INFORMATION

1. Pan uses the equity method of accounting for its investment in Sal.

2. Sal’s 2011 net income and dividends were $140,000 and $120,000, respectively.

3. Sal’s inventory, which was sold in 2011, was undervalued by $25,000 at January 2, 2011.

REQUIRED:

1. What is Pan’s income from Sal for 2011?

---

2. What is the noncontrolling interest share for 2011?

---

3. What is the total noncontrolling interest at December 31, 2011?

---

4. What will be the balance of Pan’s Investment in Sal account at December 31, 2011, if investment income from Sal is 5100,000? Ignore your answer to 1.

---

5. What is consolidated net income for Pan Corporation and Subsidiary if Pan’s net income for 2011 is $360,400? (Assume investment income from subsidiary is $100,000, and it is included in the $360,400.)