Following are several figures reported for Preston and Sanchez as of December 31, 2011:
|
Preston |
Sanchez |
|
|
Inventory |
$400,000 |
$200,000 |
|
Sales |
800,000 |
600,000 |
|
Investment income |
not given |
|
|
Cost of goods sold |
400,000 |
300,000 |
|
Operating expenses |
180,000 |
250,000 |
Preston acquired 70 percent of Sanchez in January 2010. In allocating the newly acquired subsidiary’s fair value at the acquisition date, Preston noted that Sanchez having developed a customer list worth $65,000 unrecorded on its accounting records and having a five year remaining life. Any remaining excess fair value over Sanchez’s book value was attributed to goodwill. During 2011, Sanchez sells inventory costing $120,000 to Preston for $160,000. Of this amount, 20 percent remains unsold in Preston’s warehouse at year end. For Preston’s consolidated reports, determine the following amounts to be reported for the current year.
Inventory
Sales
Cost of Goods Sold
Operating Expenses
Noncontrolling Interest in the Subsidiary’s Net Income