Baxter, Inc., owns 90 percent of Wisconsin, Inc., and 20 percent of Cleveland Company. Wisconsin, in turn, holds 60 percent of Cleveland%u2019s outstanding stock. No excess amortization resulted from these acquisitions. During the current year, Cleveland sold a variety of inventory items to Wisconsin for $40,000 although the original cost was $30,000. Of this total, Wisconsin still held $12,000 in inventory (at transfer price) at year-end.
|
During this same period, Wisconsin sold merchandise to Baxter for $100,000 although the original cost was only $70,000. At year-end, $40,000 of these goods (at the transfer price) was still on hand.
|
|
The initial value method was used to record each of these investments. None of the companies holds any other investments.
|
|
Baxter |
Wisconsin |
Cleveland |
| Sales |
$ |
(1,000,000 |
) |
$ |
(450,000 |
) |
$ |
(280,000 |
) |
| Cost of goods sold |
|
670,000 |
|
|
280,000 |
|
|
190,000 |
|
| Expenses |
|
110,000 |
|
|
60,000 |
|
|
30,000 |
|
| Dividend income: |
|
|
|
|
|
|
|
|
|
| Wisconsin |
|
(36,000 |
) |
|
0 |
|
|
0 |
|
| Cleveland |
|
(4,000 |
) |
|
(12,000 |
) |
|
0 |
|
|
|
|
|
|
|
|
|
|
|
| Net income |
$ |
(260,000 |
) |
$ |
(122,000 |
) |
$ |
(60,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
Note: Parentheses indicate a credit balance.
|
Using the above separate income statements, determine the figures that would appear on a consolidated income statement. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values.)
|
|
|
|
| Sales |
|
$ |
| Cost of goods sold |
|
$ |
| Expenses |
|
$ |
| Dividend income |
|
$ |
| Consolidated net income |
|
$ |
| Noncontrolling interests in subsidiaries' income |
|
$ |
| Controlling interest in consolidated net income |
|
$ |