Separate and consolidated financial statements of Park Corporation and its subsidiary, Stark Company, for the fiscal year ended December 31, 2006, are shown below. Park used the equity method of accounting for its investment in Stark, but neither enterprise used separate ledger accounts for intercompany revenue, expenses, gains, or losses.
Additional Information :
1. All of Stark's identifiable net assets were fairly stated at their carrying amounts on the date Park combined with Stark. The $10,000 excess of Park's investment in Stark over the current fair values (and carrying amounts) of Stark's identifiable net assets was allocated to goodwill, which was unimpaired on December 31, 2006.
2. Park sold merchandise to Stark at the same markup that Park realized on sales to its other customers.
3. Stark had acquired shares of Park's outstanding common stock on December 31, 2005. These shares were included in Stark's short-term investments.
4. Park acquired shares of its common stock for the treasury late in 2006 after the fourth-quarter dividend had been declared and paid.
From the foregoing information, provide answers for the following:
a. Percentage of Stark Company outstanding common stock owned by Park Corporation _______%
b. Intercompany sales by Park to Stark $________
c. Intercompany cost of goods sold eliminated $________
d. Intercompany investment income recognized by Park under the equity method of accounting $________
e. Amount of dividends received by Stark from Park and eliminated from other revenue $________
f. Amount of intercompany profit eliminated from ending inventories of Stark $_________
g. Number of shares of Park's common stock owned by Stark ________ shares
h. Carrying amount of Park common stock owned by Stark $________

Question

Separate and consolidated financial statements of Park Corporation and its subsidiary, Stark Company, for the fiscal year ended December 31, 2006, are shown below. Park used the equity method of accounting for its investment in Stark, but neither enterprise used separate ledger accounts for intercompany revenue, expenses, gains, or losses.
  Additional Information :
1. All of Stark's identifiable net assets were fairly stated at their carrying amounts on the date Park combined with Stark. The $10,000 excess of Park's investment in Stark over the current fair values (and carrying amounts) of Stark's identifiable net assets was allocated to goodwill, which was unimpaired on December 31, 2006.
2. Park sold merchandise to Stark at the same markup that Park realized on sales to its other customers.
3. Stark had acquired shares of Park's outstanding common stock on December 31, 2005. These shares were included in Stark's short-term investments.
4. Park acquired shares of its common stock for the treasury late in 2006 after the fourth-quarter dividend had been declared and paid.
From the foregoing information, provide answers for the following:
a. Percentage of Stark Company outstanding common stock owned by Park Corporation _______%
b. Intercompany sales by Park to Stark $________
c. Intercompany cost of goods sold eliminated $________
d. Intercompany investment income recognized by Park under the equity method of accounting $________
e. Amount of dividends received by Stark from Park and eliminated from other revenue $________
f. Amount of intercompany profit eliminated from ending inventories of Stark $_________
g. Number of shares of Park's common stock owned by Stark ________ shares
h. Carrying amount of Park common stock owned by Stark $________

Quizplus · Accepted Answer

The Answer of Separate and consolidated financial statements of Park Corporation and its subsidiary, Stark Company, for the fiscal year ended December 31, 2006, are shown below. Park used the equity method of accounting for its investment in Stark, but neither enterprise used separate ledger accounts for intercompany revenue, expenses, gains, or losses.
  Additional Information :
1. All of Stark's identifiable net assets were fairly stated at their carrying amounts on the date Park combined with Stark. The $10,000 excess of Park's investment in Stark over the current fair values (and carrying amounts) of Stark's identifiable net assets was allocated to goodwill, which was unimpaired on December 31, 2006.
2. Park sold merchandise to Stark at the same markup that Park realized on sales to its other customers.
3. Stark had acquired shares of Park's outstanding common stock on December 31, 2005. These shares were included in Stark's short-term investments.
4. Park acquired shares of its common stock for the treasury late in 2006 after the fourth-quarter dividend had been declared and paid.
From the foregoing information, provide answers for the following:
a. Percentage of Stark Company outstanding common stock owned by Park Corporation _______%
b. Intercompany sales by Park to Stark $________
c. Intercompany cost of goods sold eliminated $________
d. Intercompany investment income recognized by Park under the equity method of accounting $________
e. Amount of dividends received by Stark from Park and eliminated from other revenue $________
f. Amount of intercompany profit eliminated from ending inventories of Stark $_________
g. Number of shares of Park's common stock owned by Stark ________ shares
h. Carrying amount of Park common stock owned by Stark $________

Separate and Consolidated Financial Statements of Park Corporation and Its