Determine consolidated net income with downstream intercompany sales
Pan Corporation owns an 80 percent interest in the common stock of She Corporation, acquired several years ago at book value. Pan regularly sells merchandise to She. Information relevant to the intercompany sales and profits of Pan and She for 2011, 2012, and 2013 is as follows:
|
2011 |
2012 |
2013 |
|
|
Sales to She |
$300,000 |
$360,000 |
$600,000 |
|
Unrealized profit in She’s inventory |
|||
|
at December 31 |
90,000 |
120,000 |
60,000 |
|
She’s separate income |
1,500,000 |
1,650,000 |
1,425,000 |
|
Pan’s separate income (does not include |
|||
|
investment income) |
900,000 |
1,200,000 |
1,050,000 |
REQUIRED: Prepare a schedule showing consolidated net income for each year.