Baxter, Inc., owns 90 percent of Wisconsin, Inc., and 20 percent of Cleveland Company. Wisconsin, in turn, holds

60 percent of Cleveland’s outstanding stock. No excess amortization resulted from these acquisitions. During the current year, Cleveland sold a variety of inventory items to Wisconsin for $40,000 although the original cost was $30,000. Of this total, Wisconsin still held $12,000 in inventory (at transfer price) at year-end.

During this same period, Wisconsin sold merchandise to Baxter for $100,000 although the original cost was only $70,000. At year-end, $40,000 of these goods (at the transfer price) was still on hand.

The initial value method was used to record each of these investments. None of the companies holds any other investments.

Using the following separate income statements, determine the figures that would appear on a consolidated income statement:

           Baxter    Wisconsin    Cleveland

Sales$(1,000,000)$(450,000)$(280,000)

Cost of goods sold 670,000  280,000  190,000 

Expenses 110,000  60,000  30,000 

Dividend income:         

Wisconsin (36,000) 0  0 

Cleveland (4,000) (12,000) 0 

Net income$(260,000)$(122,000)$(60,000)

Sales?

Cost of Goods Sold?

Expenses?

Dividend Income?

Consolidated Net income?

Noncontrolling interest in subsidiary income?

Controlling interest in consolidated net income?

Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"