Bunker Corporation owns 80 percent of Harrison Company\'s stock. At the end of 2

Question

Bunker Corporation owns 80 percent of Harrison Company's stock. At the end of 20X8, Bunker and Harrison reported the following partial operating results and inventory balances Bunker Harrison Corporation Company $ 693,000 $537,000 Total sales Sales to Harrison Company Sales to Bunker Corporation Net income Operating income (excluding investment income from Harrison) Inventory on hand, December 31, 20X8, purchased from 144,200 244,200 31,000 81,000 Harrison Company Bunker Corporation 48,840 43,260 Bunker regularly prices its products at cost plus a 40 percent markup for profit. Harrison prices its sales at cost plus a 20 percent markup. The total sales reported by Bunker and Harrison include both intercompany sales and sales to nonaffiliates Required: a. What amount of sales will be reported in the consolidated income statement for 20X8? mount of sales $ 841,600 b. What amount of cost of goods sold will be reported in the 20X8 consolidated income statement? (Do not round intermediate calculations.) CR mount of cost of goods sold 636,000 c. What amount of consolidated net income and income to controlling interest will be reported in the 20X8 consolidated income statement? Consolidated net income Income to controlling interest d. What balance will be reported for inventory in the consolidated balance sheet for December 31, 20x8? nventory

Explanation / Answer

Solution a & b:

Hence amout of sales will be reported in consolidated income statement is $841,600 and COGS will be reported in consolidated income statement is $636,000.

Solution c:

Solution d:

Therefore closing inventory to be shown in consolidated balance sheet is $71,600.

Computation of Sales & COGS Particulars Bunker Corporation Harisson Company Total Sales $693,000.00 $537,000.00 $1,230,000.00 Inter company Sales: Sales to Harisson $144,200.00 $0.00 $144,200.00 Sales to Bunker $0.00 $244,200.00 $244,200.00 Net Sales $548,800.00 $292,800.00 $841,600.00 Markup on Cost 40% 20% Cost of Goods Sold
[Net Sales *100 / (100 + Markup)] $392,000.00 $244,000.00 $636,000.00

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