Determine the consolidated income appropriate to priscilla

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Reference no: EM131835345

Priscilla Dolls acquired 80% of the voting common stock of Sebrina’s Children Inc. on December 31, 2017 for a price equivalent to Sebrina’s Book Value of $144,000 with cash. The fair value of noncontrolling interest on that date was equal to the book value of $36,000. Sebrina’s Common Stock was $55,000 and Retained Earnings was $125,000 on date of acquisition. The only assets on Sebrina’s books was Cash $55,000 and Inventory $125,000. Assume equity method used and downstream sales.

During the year 2018

On March 1, Priscilla Dolls buys inventory for $4,200 from Tois-R-Us on account

On April 1, it sold that inventory purcahsed to Sebrina’s Children Inc. for $6,000 on account

Additional information related to 2018 and 2019 are as follows.

During 2018, Sebrina’s total revenues was $144,000 and total expenses was $114,000; total dividends declared and paid was $18,000. During 2019, Sebrina’s Children Inc. revenues was $180,000 and expenses was $135,000; dividends declared and paid was $24,000.

During 2018, Priscilla’s net income was $84,000 and in 2019 was $96,000 before consolidation in each year.

reflect the entries that would appear on each date aforementioned (or underlined) on the books of Priscilla for the acquisition and on both Pricilla’s and Sebrina’s books for the intra-entity inventory purchase and sale.

Assume that on November 30, 2018 Sebrina’s Children Inc. sells the entire inventory for $9,000 on account to Stalmart Corp (unrelated party).

Record the worksheet entries [SAIDETG] to consolidate

Determine the consolidated income appropriate to Priscilla and income appropriate to the NCI

Determine Priscilla’s investment balance at year end 2018 and 2019 – equity method

Same facts except omit Part II. Instead, assume that on November 30, 2019 Sebrina’s Children Inc. sells 75% of the inventory for $6,750 on account to Stalmart Corp.

Record the worksheet entries [SAIDETG] to consolidate

Determine the consolidated income appropriate to Priscilla and income appropriate to the NCI

Determine Priscilla’s investment balance at year end 2018 and 2019 – equity method.

Reference no: EM131835345

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