The Following Balances Were Taken from the Records of S

Essay

The following balances were taken from the records of S Company:
P Company owns 80% of the common stock of S Company.During 2014, P Company purchased merchandise from S Company for $4,000,000.S Company sells merchandise to P Company at cost plus 25% of cost.On December 31, 2014, merchandise purchased from S Company for $1,250,000 remains in the inventory of P Company.On January 1, 2014, P Company's inventory contained merchandise purchased from S Company for $525,000.The affiliated companies file a consolidated income tax return.There was no difference between the implied value and the book value of net assets acquired.
Required:
A.Prepare all workpaper entries necessitated by the intercompany sales of merchandise.
B.Compute noncontrolling interest in consolidated income for 2014.
C.Compute noncontrolling interest in consolidated net assets on December 31, 2014.