Chapter 5 – Problem 18
A)
Amount
Net income of PL Corporation for the year 2018 300,000
Net income of S Inc. for the year of 2018 110,000
(-) Amortization of covenant (5,000)
(+) Unrealized gross profit from the inter-entity transaction of the year
7,200
(-) Unrealized gross profit from inter-entity transaction of the year 2018
(16,200)
Consolidated net income for the year 2018 396,000
B)
Amount
Net income of S Inc. for the year 2018 110,000
(-) Amortization of covenant (5,000)
(+) Unrealized gross profit from inter-entity transaction of 2017 7,200
(-) Unrealized gross profit from inter-entity transaction of 2018 (16,200)
Net income of S Inc. for the year 2018 96,000
Controlling interest of 80% of net income 76,800
Noncontrolling interest of 20% of net income 19,200
Net income of PL Corporation for the year 2018 300,000
Controlling interest of net income of S Inc. for the year 2018 76,800
Consolidated net income for the year 2018 376,800
C)
Amount
Net income of S Inc. for the year 2018 110,000
(-) Amortization of covenant (5,000)
Net income of S Inc. for the year 2018 105,000
Controlling interest of 80% of net income 84,000
Noncontrolling interest of 20% of net income 21,000
Net income of PL Corporation for the year 2018 300,000
Controlling interest of Net income of S Inc. for the year 2018 84,000
(+) Unrealized gross profit from inter entity transaction of 2017 7,200
(-) Unrealized gross profit from inter-entity transaction of 2018 (16,200)
Consolidated net income for the year 2018 375,000
D)
Amount
Ending inventory of PL Corporation 140,000
Ending inventory of S Inc. 90,000
(-) Unrealized gross profit (16,200)
Consolidated ending inventory 213,800
E)
Amount
Land value of PL Corporation 600,000
Land value of S Inc. 200,000
