prepare in general journal form all entries necessary in the consolidated financial 614570
Downstream Sales
Peer Company owns 80% of the common stock of Seacrest Company. Peer Company sells merchandise to Seacrest Company at 25% above its cost. During 2011 and 2012 such sales amounted to $265,000 and $475,000, respectively. The 2011 and 2012 ending inventories of Seacrest Company included goods purchased from Peer Company for $125,000 and $170,000, respectively.
Peer Company reported net income from its independent operations (including intercompany profit on inventory sales to affiliates) of $450,000 in 2011 and $480,000 in 2012. Seacrest reported net income of $225,000 in 2011 and $275,000 in 2012 and did not declare dividends in either year. There were no intercompany sales prior to 2011.
Required:
- Prepare in general journal form all entries necessary in the consolidated financial statements workpapers to eliminate the effects of the intercompany sales for each of the years 2011 and 2012.
- Calculate the amount of noncontrolling interest to be deducted from consolidated income in the consolidated income statements for 2011 and 2012.
- Calculate controlling interest in consolidated income for 2012.