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    Consolidated Income Statement

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    Allen, Inc., owns all of the outstanding stock of Bowen Corporation. Amortization expense of $9,000 per year resulted from the original purchase. For 2004, the companies had the following account balances:
    Allen Bowen
    Sales 900,000 500,000
    Cost of Goods Sold 400,000 300,000
    Operations Expense 300,000 120,000
    Investment Income not given 0
    Dividends Paid 60,000 40,000

    Intercompany sales of $200,000 occurred during 2003 and again in 2004. This merchandise cost $140,000 each year. Of the total transfers, $60,000 was still held on December 31, 2003, with
    $45,000 unsold on December 31, 2004.

    a. For consolidation purposes, does the direction of the transfers (upstream or downstream) affect the balances to be reported here?

    b. Prepare a consolidated income statement for the year ending December 31, 2004.

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    https://brainmass.com/business/business-math/consolidated-income-statement-117019

    Solution Preview

    a. For consolidation purposes, does the direction of the transfers (upstream or downstream) affect the balances to be reported here?

    Yes, it would because those 2 directions differ for the ...

    Solution Summary

    A consolidated income statement is prepared.

    $2.19

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