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Penguin Corporation acquired 80 percent of the outstanding voting stock of Snow Company on January 1, 2012, for $496,000 in cash and other consideration. At the acquisition date, Penguin assessed Snows identifiable assets and liabilities at a collective net fair value of $755,000 and the fair value of the 20 percent noncontrolling interest was $124,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the individual financial records of these two companies as of December 31, 2013:

Sales	$	870,000		$	590,000
Cost of goods sold		405,000			312,000
Operating expenses		173,000			128,000
Retained earnings, 1/1/13		970,000			410,000
Inventory		369,000			133,000
Buildings (net)		381,000			180,000
Investment income		Not given			0

Each of the following problems is an independent situation:

a.

Assume that Penguin sells Snow inventory at a markup equal to 60 percent of cost. Intra-entity transfers were $113,000 in 2012 and $133,000 in 2013. Of this inventory, Snow retained and then sold $51,000 of the 2012 transfers in 2013 and held $65,000 of the 2013 transfers until 2014. On consolidated financial statements for 2013, determine the balances that would appear for the following accounts:

Cost of goods sold	$
Inventory	$
Noncontrolling interest in subsidiarys net income	$

b.

Assume that Snow sells inventory to Penguin at a markup equal to 60 percent of cost. Intra-entity transfers were $73,000 in 2012 and $103,000 in 2013. Of this inventory, $44,000 of the 2012 transfers were retained and then sold by Penguin in 2013, whereas $58,000 of the 2013 transfers were held until 2014. On consolidated financial statements for 2013, determine the balances that would appear for the following accounts:

Cost of goods sold	$
Inventory	$
Noncontrolling interest in subsidiarys net income	$

c.

Penguin sells Snow a building on January 1, 2012, for $126,000, although its book value was only $73,000 on this date. The building had a fiveyear remaining life and was to be depreciated using the straightline method with no salvage value. Determine the balances that would appear on consolidated financial statements for 2013 for the following accounts:

Consolidated Buildings (net)	$
Consolidated expenses	$
Noncontrolling interest in subsidiarys net income	$

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