CH 5 Pilihan Ganda [PDF]

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Pilihan Ganda Exercise 1. The separate incomes of Pil Corporation and Sil Corporation, a 100 percent-owned subsidiary of Pil, for 2012 are $2,000,000 and $1,000,000, respectively. Pil sells all of its output to Sil at 150 percent of Pil’s cost of production. During 2011 and 2012, Pil’s sales to Sil were $9,000,000 and $7,000,000, respectively. Sil’s inventory at December 31, 2011, included $3,000,000 of the merchandise acquired from Pil, and its December 31, 2012, inventory included $2,400,000 of such merchandise. Assume Sil sells the inventory purchased from Pil in the following year. A consolidated income statement for Pil Corporation and Subsidiary for 2012 should show controlling interest share of consolidated net income of: a $2,200,000 b $2,800,000 c $3,000,000 d $3,200,000 Pil's separate income (in thousands)



$2,000



Add: Share of Sil's income ($1,000 x 100%)



1,000



Add: Realization of profit deferred in 2011 $3,000 - ($3,000/150%)



1,000



Less: Unrealized profit in 2012 inventory $2,400 - ($2,400/150%)



(800)



Controlling share of consolidated net income



$3,200



USE THE FOLLOWING INFORMATION IN ANSWERING QUESTIONS 2 AND 3: Pan Corporation owns 75 percent of the voting common stock of Sat Corporation, acquired



at book value during 2011. Selected information from the accounts of Pan and Sat for 2011 are as follows: Pan Sales Cost of Sales



Sat



$1,800,000



$1,000,000



980,000



380,000



During 2012 Pan sold merchandise to Sat for $100,000, at a gross profit to Pan of $40,000. Half of this merchandise remained in Sat’s inventory at December 31, 2012. Sat’s December 31, 2011, inventory included unrealized profit of $8,000 on goods acquired from Pan. 2. In a consolidated income statement for Pan Corporation and Subsidiary for the year 2012, consolidated sales should be: a $2,900,000 b $2,800,000 c $2,725,000 d $2,700,000 Combined sales



$2,800



Less: Intercompany sales



(100)



Consolidated sales



$2,700



3. In a consolidated income statement for Pan Corporation and Subsidiary for the year 2012, consolidated cost of sales should be: a $1,372,000 b $1,360,000 c $1,272,000 d $1,248,000 Combined cost of sales Less: Intercompany purchases



$1,360 (100)



Less: Unrealized profit in beginning inventory



(8)



Add: Unrealized profit in ending inventory



20



Consolidated cost of sales



$1,272



Upstream sales Pid Corporation owns an 80 percent interest in Sed Corporation and at December 31, 2011, Pid’s investment in Sed on an equity basis was equal to 80 percent of Sed’s stockholders’ equity. During 2012, Sed sells merchandise to Pid for $200,000, at a gross profit to Sed of $40,000. At December 31, 2012, half of this merchandise is included in Pid’s inventory.



Separate incomes for Pid and Sed for 2012 are summarized as follows: Pid



Sed



Sales



$1,000,000



$600,000



Cost of sales



(500,000 )



(400,000 )



Gross profit



500,000



200,000



Operating expenses



(250,000)



(80,000 )



Separate incomes



$ 250,000



$ 120,000



4. Pid’s income from Sed for 2012 is: a $96,000 b $80,000 c $76,000 d $56,000 Pid's share of Sed's income ($120,000 x 80%)



$ 96,000



Less: Unrealized profit in ending inventory ($40,000 x 50% unsold x 80% owned)



(16,000)



Income from Sed



$ 80,000



5. Consolidated cost of sales for 2012 is: a $920,000 b $900,000 c $880,000 d $720,000 Combined cost of sales



$ 900,000



Less: Intercompany sales



(200,000)



Add: Unrealized profit in ending inventory Consolidated cost of sales



20,000 $ 720,000



6. Noncontrolling interest share for 2012 is: a $24,000 b $20,000 c $8,000 d $4,000 Reported income of Sed



$ 120,000



Unrealized profit



(20,000)



Sed's realized income



100,000



Noncontrolling interest percentage



20%



Noncontrolling interest share



$ 20,000



Upstream sales Par Corporation owns an 80 percent interest in Sel Corporation acquired several years ago. Sel regularly sells merchandise to its parent at 125 percent of Sel’s cost. Gross profit data of Par and Sel for 2012 are as follows: Sales Cost of goods sold Gross profit



Par



Sel



$1,000,000



$ 800,000



800,000



640,000



$ 200,000



$ 160,000



During 2012, Par purchased inventory items from Sel at a transfer price of $400,000. Par’s December 31, 2011 and 2012, inventories included goods acquired from Sel of $100,000 and $125,000, respectively. Assume Par sells the inventory purchased from Sel in the following year. 7. Consolidated sales of Par Corporation and Subsidiary for 2012 were: a $1,800,000 b $1,425,000 c $1,400,000 d $1,240,000



Combined sales



$1,800,000



Less: Intercompany sales Consolidated sales



(400,000) $1,400,000



8. The unrealized profits in the year-end 2011 and 2012 inventories were: a $100,000 and $125,000, respectively b $80,000 and $100,000, respectively c $20,000 and $25,000, respectively d $16,000 and $20,000, respectively Unrealized profit in beginning inventory $100,000 - ($100,000/125%)



$ 20,000



Unrealized profit in ending inventory $125,000 - ($125,000/125%)



$ 25,000



9. Consolidated cost of goods sold of Par Corporation and Subsidiary for 2012 was: a $1,024,000 b $1,045,000 c $1,052,800 d $1,056,000 Combined cost of goods sold Less: Intercompany sales



$1,440,000 (400,000)



Less: Unrealized profit in beginning inventory $100,000 - ($100,000/125%)=



(20,000)



Add: Unrealized profit in ending inventory $125,000 - ($125,000/125%)= Consolidated cost of goods sold Upstream and downstream sales



25,000 $ 1.045.000



Pat Corporation owns 70 percent of Sue Company’s common stock, acquired January 1, 2012. Patents from the investment are being amortized at a rate of $20,000 per year. Sue regularly sel ls merchandise to Pat at 150 percent of Sue’s cost. Pat’s December 31, 2012, and 2013 inventories include goods purchased intercompany of $112,500 and $33,000, respectively. The separate incomes (do not include investment income) of Pat and Sue for 2013 are summarized as follows: Pat Sales



Sue



$1,200,000



$ 800,000



Cost of sales



(600,000)



(500,000)



Other expenses



(400,000)



(100,000 )



Separate incomes



$ 200,000



$ 200,000



10. Total consolidated income should be allocated to controlling and noncontrolling interest shares in the amounts of: a $344,550 and $61,950, respectively b $358,550 and $60,000, respectively c $346,500 and $60,000, respectively d $346,500 and $67,950, respectively Pat's separate income Add: Income from Sue (below) Controlli n g share of consolidat ed net



$ 200,000 144,550 $ 344,550



imcome Sue's reported income Less: Patent amortization



$ 200,000 (20,000)



Add: Unrealized profit in beginning inventory [$112,500 - ($112,500/150%)]



37,500



Less: Unrealized profit in ending inventory [$33,000 - ($33,000/150%)] Sue’s adjusted and realized income



11,000 $ 206,500



Pat’s 70% controlling share of Sue’s realized income



$ 144,550



Noncontrolling interest share (30%)



$ 61,950



11. Pac acquired a 60 percent interest in Slo on January 1, 2011, for $360,000, when Slo’s net assets had a book value and fair value of $600,000. During 2011, Pac sold inventory items that cost $600,000 to Slo for $800,000, and Slo’s inventory at December 31, 2011, included one-fourth of this merchandise. Pac reported separate income from its own operations (excludes investment income) of $300,000, and Slo reported a net loss of $150,000 for 2011. Controlling share of consolidated net income for Pac Corporation and Subsidiary for 2011 is: a $260,000 b $180,000 c $160,000 d $100,000 Pac's share of Slo's reported net loss ($150,000 loss x 60%)



$(90,000)



Add: Unrealized profit in ending inventory ($200,000 x 1/4 unsold)



(50,000)



Income from Slo



(140,000)



Pac's separate income



300,000



Controlling share of consolidated net income



$160,000



12. San Corporation, a 75 percent-owned subsidiary of Par Corporation, sells inventory items to its parent at 125 percent of cost. Inventories of the two affiliates for 2011 are as follows: Par Beginning inventory Ending inventory



San



$400,000



$250,000



500,000



200,000



Par’s beginning and ending inventories include merchandise acquired from San of



$150,000 and $200,000, respectively, which is sold in the following year. If San reports net income of $300,000 for 2011, Par’s income from San will be: a $255,000 b $217,500 c $215,000 d $195,000 San's reported net income



$300,000



Add: Realized profit in beginning inventory $150,000 - ($150,000/1.25)



30,000



Less: Deferred profit in ending inventory $200,000 - ($200,000/1.25)



(40,000)



Income from San



$290,000



Par’s 75% controlling share of San’s income



$217,500



Noncontrolling interest share (25%)



$ 72,500



Determine consolidated net income with downstream intercompany sales Pan Corporation owns an 80 percent interest in the common stock of She Corporation, acquired several years ago at book value. Pan regularly sells merchandise to She. Information relevant to the intercompany sales and profits of Pan and She for 2011, 2012, and 2013 is as follows:



Sales to She



2011



2012



2013



$ 300,000



$ 360,000



$ 600,000



90,000



120,000



60,000



1,500,000



1,650,000



1,425,000



900,000



1,200,000



1,050,000



Unrealized profit in She’s Inventory at December 31 She’s separate income Pan’s separate income (does



not Include investment income)



REQUIRED: Prepare a schedule showing consolidated net income for each year. 2011 Pan's separate income Add: 80% of She's reported income



$



2012



2013



900 $ 1.200 $ 1.050 1.200



1.320



1.140



90



120



(120)



(60)



Add: Realization of profits in beginning inventory Less: Unrealized profits in ending inventory Controlling share of consolidated NI



(90)



$ 2.010 $ 2.490 $ 2.250



Noncontrolling interest share 1,500 x 20%



300



1,650 x 20%



330



1,425 x 20% Consolidated net income



285 $ 2.310



$ 2.820 $



2.535