Hattrick Corp.is a wholly owned,parent-founded subsidiary of Bobby Inc.The unconsolidated statements of income and the statement of changes of retained earnings for the two companies for the year ended December 31,20X6,are as follows (in 000s):
Additional information:
• Bobby sells some of its output to Hattrick.During 20X6,intercompany sales amounted to $25,000,000.Hattrick has accounts payable owing to Bobby for $200,000 at December 31,20X6.
• Bobby owns the land on which Hattrick's building is located.Bobby leases the land to Hattrick for $30,000 per month.
Bobby accounts for its investment in Hattrick under the cost method
Assume that Bobby is a private corporation that reports under ASPE.Prepare the statement of income and retained earnings for Bobby for the year 20X6 using the equity method.

Question

Hattrick Corp.is a wholly owned,parent-founded subsidiary of Bobby Inc.The unconsolidated statements of income and the statement of changes of retained earnings for the two companies for the year ended December 31,20X6,are as follows (in 000s):  
Additional information:
• Bobby sells some of its output to Hattrick.During 20X6,intercompany sales amounted to $25,000,000.Hattrick has accounts payable owing to Bobby for $200,000 at December 31,20X6.
• Bobby owns the land on which Hattrick's building is located.Bobby leases the land to Hattrick for $30,000 per month.
Bobby accounts for its investment in Hattrick under the cost method
Assume that Bobby is a private corporation that reports under ASPE.Prepare the statement of income and retained earnings for Bobby for the year 20X6 using the equity method.

Quizplus · Accepted Answer

The Answer of Hattrick Corp.is a wholly owned,parent-founded subsidiary of Bobby Inc.The unconsolidated statements of income and the statement of changes of retained earnings for the two companies for the year ended December 31,20X6,are as follows (in 000s):  
Additional information:
• Bobby sells some of its output to Hattrick.During 20X6,intercompany sales amounted to $25,000,000.Hattrick has accounts payable owing to Bobby for $200,000 at December 31,20X6.
• Bobby owns the land on which Hattrick's building is located.Bobby leases the land to Hattrick for $30,000 per month.
Bobby accounts for its investment in Hattrick under the cost method
Assume that Bobby is a private corporation that reports under ASPE.Prepare the statement of income and retained earnings for Bobby for the year 20X6 using the equity method.