Several years ago polar inc acquired an 80 interest in

Reference no: EM13590222

Several years ago, Polar Inc. acquired an 80% interest in Icecap Co. The book values of Icecap's asset and liability accounts at that time were considered to be equal to their fair values. Polar's acquisition value corresponded to the underlying book value of Icecap so that no allocations or goodwill resulted from the transaction.The following selected account balances were from the individual financial records of these two companies as of December 31, 2011:

	Polar Inc.	Icecap Co.
Sales	$896,000	$504,000
Cost of goods sold	406,000	276,000
Operating expenses	210,000	147,000
Retained earnings, 1/1/11	1,036,000	252,000
Inventory	484,000	154,000
Buildings (net)	501,000	220,000
Investment income	Not given

Assume that Polar sold inventory to Icecap at a markup equal to 25% of cost. Intra-entity transfers were $130,000 in 2010 and $165,000 in 2011. Of this inventory, $39,000 of the 2010 transfers were retained and then sold by Icecap in 2011, while $55,000 of the 2011 transfers were held until 2012.

Required:
For the consolidated financial statements for 2011, determine the balances that would appear for the following accounts.

(1)Cost of Goods Sold
(2)Inventory
(3)Noncontrolling Interest in Subsidiary's Net Income

Reference no: EM13590222

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