summary income statement information for pas corporation and its 70 percent owned su 4374504

Summary income statement information for Pas Corporation and its 70 percent-owned subsidiary, Sit, for the year 2012 is as follows (in thousands): Pas Sit Sales ……………………………… $4,000 …………… $1,600 Income from Sit …………………….. 196 ……………….. – Cost of sales …………………….. (2,400) ……………… (800) Depreciation expense ……………… (200) ………………. (160) Other expenses ……………………. (796) ……………… (360) Net income ………………………. $ 800 ……………… $ 280 REQUIRED 1. Assume that Pas acquired its 70 percent interest in Sit at book value on January 1, 2011, when the fair value of Sits’ assets and liabilities were equal to recorded book values. There were no intercompany transactions during 2011 and 2012. Prepare a consolidated income statement for Pas Corporation and Subsidiary for 2012. 2. Assume that Pas acquired its 70 percent interest in Sit on January 1, 2011, for $560,000. $120,000 was allocated to a reduction of overvalued equipment with a five-year remaining useful life and the remainder was allocated to goodwill. Sit’s book value of total stockholders’ equity was $640,000. There were no intercompany transactions during 2011 and 2012. Prepare a consolidated income statement for Pas Corporation and Subsidiary for 2012. View Solution:
Summary income statement information for Pas Corporation and its 70

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