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Workpaper Journal Entries LO 6 LO 8 Pico Company, a truck manufacturer, owns 90% of the voting stock of Seward Company. On January 1, 2014, Pico...
Workpaper Journal Entries LO 6 LO 8
Pico Company, a truck manufacturer, owns 90% of the voting stock of Seward Company. On January 1, 2014, Pico Company sold trucks to Seward Company for $350,000. The trucks, which represented inventory to Pico Company, had a cost to Pico Company of $260,000. The management of Seward Company estimated that the trucks had a useful life of six years from the date of purchase. Seward Company uses the straight-line method to depreciate its capital assets.
In 2014, Pico Company reported $600,000 in net income from its independent operations (including sales to affiliates but excluding dividend or equity income from subsidiary), and Seward Company reported $200,000 in net income from its operations.
Required:
A. Prepareingeneraljournalformtheworkpaperentriesnecessarybecauseoftheintercompanysalesin:
(1) The consolidated financial statements workpaper for the year ended December 31, 2014.
(2) The consolidated financial statements workpaper for the year ended December 31, 2015 .
B. CalculatecontrollinginterestinconsolidatednetincomefortheyearendedDecember31,2014.
