Find Corp and has elected to use proportionate consolidation method to report its investment in Find Corp. for 2013. Both companies are subject to 40% tax rate. What is the total amount of inventory that would appear on Seek's Consolidated Balance Sheet as at December 31, 2013?

Question

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Find Corp. has $120,000 of inventory and Seek Corp. has $12,000 of inventory. Under proportionate consolidation, Seek Corp. would report 80% of Find Corp.'s inventory, which is $96,000. Therefore, the total amount of inventory that would appear on Seek's Consolidated Balance Sheet as at December 31, 2013 is $96,000 + $12,000 = $108,000.

Find Corp and Has Elected to Use Proportionate Consolidation Method