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X purchased 30% of Y of Y on January 1,2002 for $300,000.On the date,Y's net assets of Y had a book value of $500,000.Any Acquisition Differential on the acquisition date is to be allocated to Y's Equipment,which had a remaining useful life of 5 years from the date of acquisition.Y paid dividends of $20,000 in each year.
Y's income statements for 2002 and 2003 showed the following:
-UNI Inc.owns 30% of the outstanding voting shares of IOU Inc.UNI has significant influence over IOU.UNI's Investment in IOU Account had a balance of $500,000 on January 1,2003.Amortization of the Acquisition Differential amounted to $20,000 per year.On December 31,2003 UNI reported a Net Income of $150,000 and paid dividends in the amount of $15,000.In 2002 IOU had sold Inventory to UNI for $30,000,which was a 50% mark-up above IOU's cost.This inventory was sold to outsiders during 2003.During 2003,UNI sold inventory to IOU and recorded a profit of $30,000 on the sale.Half of this inventory was still on hand at the end of 2003.Both companies are subject to a tax rate of 30%.UNI's Income statement for 2003 showed Sales and Operating Expenses (including Income Taxes)of $800,000 and $600,000 respectively before the equity method journal entries were prepared with respect to the Investment in UNI.
Required:
Prepare an abbreviated income statement for UNI Inc.one the Investment in IOU has been correctly accounted for in accordance with GAAP.

Question

The following information pertains to questions 
X purchased 30% of Y of Y on January 1,2002 for $300,000.On the date,Y's net assets of Y had a book value of $500,000.Any Acquisition Differential on the acquisition date is to be allocated to Y's Equipment,which had a remaining useful life of 5 years from the date of acquisition.Y paid dividends of $20,000 in each year.
Y's income statements for 2002 and 2003 showed the following:
-UNI Inc.owns 30% of the outstanding voting shares of IOU Inc.UNI has significant influence over IOU.UNI's Investment in IOU Account had a balance of $500,000 on January 1,2003.Amortization of the Acquisition Differential amounted to $20,000 per year.On December 31,2003 UNI reported a Net Income of $150,000 and paid dividends in the amount of $15,000.In 2002 IOU had sold Inventory to UNI for $30,000,which was a 50% mark-up above IOU's cost.This inventory was sold to outsiders during 2003.During 2003,UNI sold inventory to IOU and recorded a profit of $30,000 on the sale.Half of this inventory was still on hand at the end of 2003.Both companies are subject to a tax rate of 30%.UNI's Income statement for 2003 showed Sales and Operating Expenses (including Income Taxes)of $800,000 and $600,000 respectively before the equity method journal entries were prepared with respect to the Investment in UNI.
Required:
Prepare an abbreviated income statement for UNI Inc.one the Investment in IOU has been correctly accounted for in accordance with GAAP.

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The Answer of The following information pertains to questions 
X purchased 30% of Y of Y on January 1,2002 for $300,000.On the date,Y's net assets of Y had a book value of $500,000.Any Acquisition Differential on the acquisition date is to be allocated to Y's Equipment,which had a remaining useful life of 5 years from the date of acquisition.Y paid dividends of $20,000 in each year.
Y's income statements for 2002 and 2003 showed the following:
-UNI Inc.owns 30% of the outstanding voting shares of IOU Inc.UNI has significant influence over IOU.UNI's Investment in IOU Account had a balance of $500,000 on January 1,2003.Amortization of the Acquisition Differential amounted to $20,000 per year.On December 31,2003 UNI reported a Net Income of $150,000 and paid dividends in the amount of $15,000.In 2002 IOU had sold Inventory to UNI for $30,000,which was a 50% mark-up above IOU's cost.This inventory was sold to outsiders during 2003.During 2003,UNI sold inventory to IOU and recorded a profit of $30,000 on the sale.Half of this inventory was still on hand at the end of 2003.Both companies are subject to a tax rate of 30%.UNI's Income statement for 2003 showed Sales and Operating Expenses (including Income Taxes)of $800,000 and $600,000 respectively before the equity method journal entries were prepared with respect to the Investment in UNI.
Required:
Prepare an abbreviated income statement for UNI Inc.one the Investment in IOU has been correctly accounted for in accordance with GAAP.

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