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Pie Bakery owns 60 percent of slice products companys stock. On jan 1, inventory reported by...

Pie Bakery owns 60 percent of slice products companys stock. On jan 1, inventory reported by pie included 20,000 bags of flour purchased from slice at $9 per bag. By December 31, 20X9 all the beginning inventory prucased from slice had been baked into products and sold to customers by Pie. There were no transactions between Pie and Slice during 20X9.

Both pie and slice price their sales at cost plus 50 percent markup for profit. Pie reported income from its baking operations of 300,000, and slice reported net income of 250,000 for 20x9.

a. compute Gogs

b. give the consolidation entries

c. compute amounts reported as consolidated ni and income assigned to the controlling interest in the 20x9 consolidated income statement

if someone could help me with these, that would be amazing!

Business   Accounting   
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Homework Answers

Answer #1

a. Cost per bag of flour = $9 / 1.5 = $6

COGS = Cost per bag of flour x Bags sold
= $6 x 20,000 = $120,000

b.

Account titles Debit Credit
Retained Earnings ($60,000 x 60%) $36,000
Non Controlling Interest ($60000 x 40%) $24,000
Cost of goods sold (20000 x $3) $60,000

c.

Operating income of Pie $300,000
Net Income of Slice 250,000
$550,000
Add: Inventory profit realized in 2019 60,000
$610,000
Less: Income assigned to noncontrolling sharehold
(250000+60000) x 0.40		 (124000)
Consolidated net income $486,000
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