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    Lathian Soal CH 5 Kelompok 7 P5-3

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    Ashdh
    Pot Company owns controlling interests in San and Tay Corporations. It must calculate consolidated inventory balances for financial statements. For 2012: - Consolidated inventory is $222,000 - It adjusts for $8,000 unrealized intercompany profit in Pot's inventory and $15,500 in San's inventory For 2013: - Consolidated inventory is $221,000 - It adjusts for $9,000 unrealized intercompany profit in Pot's inventory and $12,500 in San's inventory

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    Lathian Soal CH 5 Kelompok 7 P5-3

    Uploaded by

    Ashdh
    768 views2 pages
    Pot Company owns controlling interests in San and Tay Corporations. It must calculate consolidated inventory balances for financial statements. For 2012: - Consolidated inventory is $222,000 - It adjusts for $8,000 unrealized intercompany profit in Pot's inventory and $15,500 in San's inventory For 2013: - Consolidated inventory is $221,000 - It adjusts for $9,000 unrealized intercompany profit in Pot's inventory and $12,500 in San's inventory

    Original Title

    TUGAS PROBLEM 5_KEL 7

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    Pot Company owns controlling interests in San and Tay Corporations. It must calculate consolidated inventory balances for financial statements. For 2012: - Consolidated inventory is $222,000 - It adjusts for $8,000 unrealized intercompany profit in Pot's inventory and $15,500 in San's inventory For 2013: - Consolidated inventory is $221,000 - It adjusts for $9,000 unrealized intercompany profit in Pot's inventory and $12,500 in San's inventory

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    768 views2 pages

    Lathian Soal CH 5 Kelompok 7 P5-3

    Uploaded by

    Ashdh
    Pot Company owns controlling interests in San and Tay Corporations. It must calculate consolidated inventory balances for financial statements. For 2012: - Consolidated inventory is $222,000 - It adjusts for $8,000 unrealized intercompany profit in Pot's inventory and $15,500 in San's inventory For 2013: - Consolidated inventory is $221,000 - It adjusts for $9,000 unrealized intercompany profit in Pot's inventory and $12,500 in San's inventory

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    LATHIAN SOAL CH 5 KELOMPOK 7

    P5-3

    Computations (parent buys from one subsidiary and sells to the other) Pot Company owns controlling
    interests in San and Tay Corporations, having acquired an 80 percent interest in San in 2011, and a 90
    percent interest in Tay on January 1, 2012. Pot’s investments in San and Tay were at book value equal to
    fair value. Inventories of the affiliated companies at December 31, 2012, and December 31, 2013, were
    as follows:

    Pot sells to San at a 25 percent markup based on cost, and Tay sells to Pot at a 20 percent markup based
    on cost. Pot’s beginning and ending inventories for 2013 consisted of 40 percent and 50 percent,
    respectively, of goods acquired from Tay. All of San’s inventories consisted of merchandise acquired
    from Pot.

    REQUIRED

    1. Calculate the inventory that should appear in the December 31, 2012, consolidated balance
    sheet.
    2. Calculate the inventory that should appear in the December 31, 2013, consolidated balance
    sheet.

    THE ANSWER:

    1. Inventories appearing in consolidated balance sheet at December 31, 2012

    Beginning inventory — Pot ($120,000 - $8,000a) $112,000

    Beginning inventory — San ($77,500 - $15,500b) 62,000

    Beginning inventory — Tay ($48,000 - 0) 48,000

    Inventories December 31 $222,000

    Intercompany profit:

    a. Pot:
    Inventory acquired intercompany ($120,000 x 40%) $ 48,000
    Cost of intercompany inventory ($48,000/1.2) (40,000)
    Unrealized profit in Pot's inventory $ 8,000
    b. San:
    Inventory acquired intercompany ($77,500 x 100%) $ 77,500
    Cost of intercompany inventory ($77,500/1.25) (62,000)
    Unrealized profit in San's inventory $ 15,500

    2. Inventories appearing in consolidated balance sheet at December 31, 2013

    Ending inventory — Pot ($108,000 - $9,000c) $ 99,000

    Ending inventory — San ($62,500 - $12,500d) 50,000

    Ending inventory — Tay ($72,000 - 0) 72,000

    Inventories December 31 $221,000

    Intercompany profit:

    c. Pot:
    Inventory acquired intercompany ($108,000 x 50%) $ 54,000
    Cost of intercompany inventory ($54,000/1.2) (45,000)
    Unrealized profit in Pot's inventory $ 9,000
    d. San:
    Inventory acquired intercompany ($62,500 x 100%) $ 62,500
    Cost of intercompany inventory ($62,500/1.25) (50,000)
    Unrealized profit in San's inventory $ 12,500

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