Baxter Inc owns 90 percent of Wisconsin Inc and 20 percent o

Baxter, Inc., owns 90 percent of Wisconsin, Inc., and 20 percent of Cleveland Company. Wisconsin, in turn holds 60 percent of Cleveland\'s outstanding stock. No excess amortization resulted from these acquisitions During the current year, Cleveland sold a variety of inventory items to Wisconsin for $40,000 although the original cost was $30,000. Of this total, Wisconsin still held $12,000 in inventory (at transfer price) at year- end During this same period, Wisconsin sold merchandise to Baxter for $100,000 although the original cost was only $70,000. At year-end, $40,000 of these goods (at the transfer price) was still on hand The initial value method was used to record each of these investments. None of the companies holds any other investments Wisconsin Cleveland $(1,000,000) $(450,000) $(280,000) 190,000 30,000 Baxter Sales Cost of goods sold Expenses Dividend income 670,000 110,000 280,000 60,000 Wisconsin Cleveland 0 (4,000) (12,000) (36,000) Net income $(260,000) $(122,000) $ (60,000) Using the above separate income statements, determine the figures that would appear on a consolidated income statement Sales Cost of goods sold Expenses Dividend income Consolidated net income Noncontrolling interests in subsidiaries income Controlling interest in consolidated net income

Solution

Income statement

Sales ($1,000,000 + $450,000 + $280,000 - $100,000 - $40,000)

$        1,590,000

Cost of goods sold ($670,000 + $280,000 + $190,000 - $100,000 - $25000)

$        1,015,000

Expenses

$            200,000

Dividend Income

$                       -  

Consolidated Net Income

$            375,000

Non-Controlling interest in subsidiaries\' income

$              24,620

   Controlling interest in consolidated net income

$            350,380

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Income statement
Sales ($1,000,000 + $450,000 + $280,000 - $100,000 - $40,000)	$        1,590,000
Cost of goods sold ($670,000 + $280,000 + $190,000 - $100,000 - $25000)	$        1,015,000
Expenses	$            200,000
Dividend Income	$                       -
Consolidated Net Income	$            375,000
Non-Controlling interest in subsidiaries\' income	$              24,620
Controlling interest in consolidated net income	$            350,380