Plover Corporation acquired 80% of Sink Inc.equity on January 1,2010,when the book values of Sink's assets and liabilities were equal to their fair values.The cost of the investment was equal to 80% of the book value of Sink's net assets.
Plover separate income (excluding Sink)was $1,800,000,$1,700,000 and $1,900,000 in 2010,2011 and 2012 respectively.Plover sold inventory to Sink during 2010 at a gross profit of $48,000 and one quarter remained at Sink at the end of the year.The remaining 25 percent was sold in 2011.At the end of 2011,Plover has $25,000 of inventory received from Sink from a sale of $100,000 which cost Sink $80,000.There are no unrealized profits in the inventory of Plover or Sink at the end of 2012.Plover uses the equity method in its separate books.Select financial information for Sink follows:
Required:
Prepare a schedule to determine the controlling interest share of the consolidated net income for 2010,2011,and 2012.

Question

Plover Corporation acquired 80% of Sink Inc.equity on January 1,2010,when the book values of Sink's assets and liabilities were equal to their fair values.The cost of the investment was equal to 80% of the book value of Sink's net assets.
Plover separate income (excluding Sink)was $1,800,000,$1,700,000 and $1,900,000 in 2010,2011 and 2012 respectively.Plover sold inventory to Sink during 2010 at a gross profit of $48,000 and one quarter remained at Sink at the end of the year.The remaining 25 percent was sold in 2011.At the end of 2011,Plover has $25,000 of inventory received from Sink from a sale of $100,000 which cost Sink $80,000.There are no unrealized profits in the inventory of Plover or Sink at the end of 2012.Plover uses the equity method in its separate books.Select financial information for Sink follows:
  Required:
Prepare a schedule to determine the controlling interest share of the consolidated net income for 2010,2011,and 2012.

Quizplus · Accepted Answer

The Answer of Plover Corporation acquired 80% of Sink Inc.equity on January 1,2010,when the book values of Sink's assets and liabilities were equal to their fair values.The cost of the investment was equal to 80% of the book value of Sink's net assets.
Plover separate income (excluding Sink)was $1,800,000,$1,700,000 and $1,900,000 in 2010,2011 and 2012 respectively.Plover sold inventory to Sink during 2010 at a gross profit of $48,000 and one quarter remained at Sink at the end of the year.The remaining 25 percent was sold in 2011.At the end of 2011,Plover has $25,000 of inventory received from Sink from a sale of $100,000 which cost Sink $80,000.There are no unrealized profits in the inventory of Plover or Sink at the end of 2012.Plover uses the equity method in its separate books.Select financial information for Sink follows:
  Required:
Prepare a schedule to determine the controlling interest share of the consolidated net income for 2010,2011,and 2012.

Plover Corporation Acquired 80% of Sink Inc