Pine Company, a Computer Manufacturer, Owns 90% of the Outstanding

Essay

Pine Company, a computer manufacturer, owns 90% of the outstanding stock of Slider Company. On January 1, 2017, Pine sold computers to Slider for $500,000. The computers, which are inventory to Pine, had a cost to Pine of $350,000. Slider Company estimated that the computers had a useful life of six years from the date of purchase.
Slider Company reported net income of $310,000, and Pine Company reported net income of $870,000 from its independent operations (including sales to affiliates) for the year ended December 31, 2017.
Required:
A. Prepare in general journal form the workpaper entries necessary because of the intercompany sales in the consolidated statements workpaper for both 2017 and 2018.
B. Calculate controlling interest in consolidated net income for 2017.