Sweeny Corporation owns 60 percent of Bitner Company's shares. Partial 20X2 financial data for the companies...

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Sweeny Corporation owns 60 percent of Bitner Company's shares.Partial 20X2 financial data for the companies and consolidatedentity were as follows:
Sweeny Corporation Bitner Company
  Sales $ 550,000 $ 450,000
  Cost of Goods Sold 310,000 300,000
  Inventory, Dec. 31 180,000 210,000
On January 1, 20X2, Sweeny's inventory contained items purchasedfrom Bitner for $75,000. The cost of the units to Bitner was$50,000. All intercorporate sales during 20X2 were made by Bitnerto Sweeny.
Required:
a. What amount of intercorporate sales occurred in 20X2?
b.
How much unrealized intercompany profit existed on January 1,20X2? On December 31, 20X2?
c.
Prepare the worksheet consolidation entries relating toinventory and cost of goods sold needed to prepare consolidatedfinancial statements for 20X2. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.)
Record the entry to eliminate the beginning inventoryprofit.
Record the entry to eliminate the intercompany inventorysale.
d.
If Bitner reports net income of $90,000 for 20X2, what amount ofincome is assigned to the noncontrolling interest in the 20X2consolidated income statement?

Answer & Explanation Solved by verified expert

3.7 Ratings (638 Votes)

a Amount of intercorporate sales Total Sales Sweenys Sales 550000 450000 550000 45000060 1000000 550000 270000 1000000 820000 180000 b Unrealized Intercompany profit See Answer

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Sweeny Corporation owns 60 percent of Bitner Company's shares.Partial 20X2 financial data for the companies and consolidatedentity were as follows:Sweeny CorporationBitner Company Sales$550,000$450,000 Cost of Goods Sold310,000300,000 Inventory, Dec. 31180,000210,000On January 1, 20X2, Sweeny's inventory contained items purchasedfrom Bitner for $75,000. The cost of the units to Bitner was$50,000. All intercorporate sales during 20X2 were made by Bitnerto Sweeny.Required:a. What amount of intercorporate sales occurred in 20X2?b.How much unrealized intercompany profit existed on January 1,20X2? On December 31, 20X2?c.Prepare the worksheet consolidation entries relating toinventory and cost of goods sold needed to prepare consolidatedfinancial statements for 20X2. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.)*Record the entry to eliminate the beginning inventoryprofit.*Record the entry to eliminate the intercompany inventorysale.d.If Bitner reports net income of $90,000 for 20X2, what amount ofincome is assigned to the noncontrolling interest in the 20X2consolidated income statement?

	Sweeny Corporation		Bitner Company
Sales	$	550,000	$	450,000
Cost of Goods Sold		310,000		300,000
Inventory, Dec. 31		180,000		210,000