Question

Pilfer Company acquired 90 percent ownership of Scrooge Corporation in 20X7, at underlying book value. On that date, the fair value of noncontrolling interest was equal to 10 percent of the book value of Scrooge Corporation. Pilfer purchased inventory from Scrooge for $90,000 on August 20, 20X8, and resold 70 percent of the inventory to unaffiliated companies on December 1, 20X8, for $100,000. Scrooge produced the inventory sold to Pilfer for $67,000. The companies had no other transactions during 20X8. Based on the information given above, what inventory balance will be reported by the consolidated entity on December 31, 20X8?

Answer 1

Based on the cost of producing the inventory by Scrooge, the consolidated inventory balance on December 31 will be $20,100.

What is the inventory balance for the consolidated entity?

This can be found as:

= Cost of inventory sold to Pilfer - Amount of goods sold

Solving gives:

= 67,000 x (1 - 70%)

= 67,000 x 30%

= $20,100

Find out more on consolidated inventory at brainly.com/question/15415717.

#SPJ1