Power Company owns an 70% controlling interest in the Shelton Company. Shelton regularly sells merchandise to Power, which then sells to outside parties. The gross profit on these sales is the same as sales to outside parties. On January 1, 20X4, Power sold land and a building to Shelton. Twenty percent of the price of the real estate was allocated to land and the remaining amount to structures. Additional information for the companies for 20X4 is summarized as follows:
Prepare income distribution schedules for 20X4 for Power and Shelton as they would be prepared to distribute income to the noncontrolling and controlling interests in support of consolidated worksheets.

Question

Power Company owns an 70% controlling interest in the Shelton Company. Shelton regularly sells merchandise to Power, which then sells to outside parties. The gross profit on these sales is the same as sales to outside parties. On January 1, 20X4, Power sold land and a building to Shelton. Twenty percent of the price of the real estate was allocated to land and the remaining amount to structures. Additional information for the companies for 20X4 is summarized as follows:  
Prepare income distribution schedules for 20X4 for Power and Shelton as they would be prepared to distribute income to the noncontrolling and controlling interests in support of consolidated worksheets.

Quizplus · Accepted Answer

The Answer of Power Company owns an 70% controlling interest in the Shelton Company. Shelton regularly sells merchandise to Power, which then sells to outside parties. The gross profit on these sales is the same as sales to outside parties. On January 1, 20X4, Power sold land and a building to Shelton. Twenty percent of the price of the real estate was allocated to land and the remaining amount to structures. Additional information for the companies for 20X4 is summarized as follows:  
Prepare income distribution schedules for 20X4 for Power and Shelton as they would be prepared to distribute income to the noncontrolling and controlling interests in support of consolidated worksheets.

Power Company Owns an 70% Controlling Interest in the Shelton