Question - Petersen owns 80% of Seavoss, acquired several years ago at a price equal to book value. Petersen and Seavoss sell merchandise to each other. For 2014, unconfirmed profits in inventories are as follows: Petersen: Beginning Inventory- $20,000 Ending Inventory- $25,000. Seavoss Beginning Inventory- $10,000 Ending Inventory- $8,000. Total upstream sales in 2014 were $400,000; downstream sales were $600,000. Seavoss' reported income for 2014 was 100,000
Required:
a) Prepare the necessary consolidated working paper eliminations for 2014
b) Calculate Petersen's equity in Seavoss income for 2014, assuming the only intercompany eliminations are for merchandise sales.
c) Calculate noncontrolling interest in consolidated net income for 2014, assuming the only intercompany eliminations are for merchandise sales.