Homework Assignment - Chapter 7
Saved
16
Problem 7-19 (LO 7-6)
Up and its 80 percent-owned subsidiary (Down) reported the following figures for the year ending December 31, 2018. Down paid
dividends of $53,000 during this period.
7
Up
Down
Sales
$(1,060,000) $(530,000)
Cost of goods sold
530,000
248,100
Operating expenses
307,400
106,000
Dividend income
(42,400)
0
Net income
$(265,000) $(175,900)
Print
References
In 2017, intra-entity gross profits of $53,000 on upstream transfers of $159,000 were deferred into 2018. In 2018, intra-entity gross
profits of $69,900 on upstream transfers of $192,800 were deferred into 2019.
a. What amounts appear for each line in a consolidated income statement?
b. What income tax expense should appear on the consolidated income statement if each company files a separate return? Assume
that the tax rate is 30 percent.
a
b
Sales
Cost of goods sold
Operating expenses
Dividend Income
Consolidated net income
Noncontrolling interest in consolidated net income
Controlling interest in consolidated net income
Income tax expense
< Prex
16 of 18
Next
