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75% of the Goodwill is allocated to the parent. Assume that the subsidiary sells inventory to the parent (upstream) which includes that inventory in products that it ultimately sells to customers outside of the controlled group. You have compiled the following data as of 2015 and 2016:

	2015	2016
Transfer price for inventory sale	$600,000	$700,000
Cost of goods sold	(500,000)	(580,000)
Gross profit	$100,000	$120,000
% Inventory remaining	25%	35%
Gross profit deferred	$25,000	$42,000
EOY receivable/payable	$70,000	$120,000

The inventory not remaining at the end of the year has been sold outside of the controlled group. The parent uses the equity method of pre-consolidation investment bookkeeping. The parent and the subsidiary report the following pre-consolidation financial statements at December 31, 2016:

	Parent	Subsidiary			Parent	Subsidiary
Income statement:				Balance sheet:
Sales	$6,700,000	$2,500,000		Cash	$600,000	$400,000
Cost of goods sold	(4,500,000)	(1,500,000)		Accounts receivable	800,000	600,000
Gross profit	2,200,000	1,000,000		Inventory	1,000,000	800,000
Income (loss) from subsidiary	122,250			Equity investment	1,401,000
Operating expenses	(2,000,000)	(800,000)		Property, plant and equipment (PPE), net	3,700,000	1,000,000
Net income	$322,250	$200,000			$7,501,000	$2,800,000
Statement of retained earnings:
BOY retained earnings	$2,000,000	$1,000,000		Current liabilities	$878,750	$500,000
Net income	322,250	200,000		Long-term liabilities	3,000,000	800,000
Dividends	(200,000)	(40,000)		Common stock	500,000	140,000
EOY retained earnings	$2,122,250	$1,160,000		APIC	1,000,000	200,000
				Retained earnings	2,122,250	1,160,000
					$7,501,000	$2,800,000

a. Disaggregate and document the activity for the 100% Acquisition Accounting Premium (AAP), the controlling interest AAP and the noncontrolling interest AAP. (Complete for the first four years only.)

	Unamortized		Unamortized		Unamortized		Unamortized
	AAP	2010	AAP	2011	AAP	2012	AAP	2013
	1/1/2010	Amortization	12/31/2010	Amortization	12/31/2011	Amortization	12/31/2012	Amortization
100%
Patent	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Goodwill	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
75%
Patent	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Goodwill	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
25%
Patent	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Goodwill	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer

b. Calculate and organize the profits and losses on intercompany transactions and balances.

	Downstream	Upstream
Intercompany profit on 1/1/16	Answer	Answer
Intercompany profit on 12/31/16	Answer	Answer

f. Independently calculate consolidated net income, controlling interest net income and noncontrolling interest net income.

Use a negative sign with your answer to indicate a reduction to net income.

Parent's stand-alone net income	Answer
Subsidiary's stand-alone net income	Answer
Answer75% AAP amortization25% AAP amortization100% AAP amortization75% realized upstream deferred profits25% realized upstream deferred profits100% realized upstream deferred profits75% unrealized upstream deferred profits25% unrealized upstream deferred profits100% unrealized upstream deferred profits	Answer
Answer75% AAP amortization25% AAP amortization100% AAP amortization75% realized upstream deferred profits25% realized upstream deferred profits100% realized upstream deferred profits75% unrealized upstream deferred profits25% unrealized upstream deferred profits100% unrealized upstream deferred profits	Answer
Less: 100% AAP amortization	Answer
Consolidated net income	Answer
Parent's stand-alone net income	Answer
75% Subsidiary's stand-alone net income	Answer
Answer75% AAP amortization25% AAP amortization100% AAP amortization75% realized upstream deferred profits25% realized upstream deferred profits100% realized upstream deferred profits75% unrealized upstream deferred profits25% unrealized upstream deferred profits100% unrealized upstream deferred profits	Answer
Answer75% AAP amortization25% AAP amortization100% AAP amortization75% realized upstream deferred profits25% realized upstream deferred profits100% realized upstream deferred profits75% unrealized upstream deferred profits25% unrealized upstream deferred profits100% unrealized upstream deferred profits	Answer
Less: 75% AAP amortization	Answer
Consolidated net income attributable to the controlling interest	Answer
25% of subsidiary's stand-alone net income	Answer
Answer75% AAP amortization25% AAP amortization100% AAP amortization75% realized upstream deferred profits25% realized upstream deferred profits100% realized upstream deferred profits75% unrealized upstream deferred profits25% unrealized upstream deferred profits100% unrealized upstream deferred profits	Answer
Answer75% AAP amortization25% AAP amortization100% AAP amortization75% realized upstream deferred profits25% realized upstream deferred profits100% realized upstream deferred profits75% unrealized upstream deferred profits25% unrealized upstream deferred profits100% unrealized upstream deferred profits	Answer
Less: 25% AAP amortization	Answer
Consolidated net income attributable to the noncontrolling interest	Answer

PLEASE HELP WITH PART "F". i DONT KNOW HOW TO GET THE ANSWER?

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