Summer Company sells all its output at 25 percent above cost. Parade Corporation purchases all its inventory from Summer

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Summer Company Sells All Its Output At 25 Percent Above Cost Parade Corporation Purchases All Its Inventory From Summer 1 (126.34 KiB) Viewed 91 times

Summer Company sells all its output at 25 percent above cost. Parade Corporation purchases all its inventory from Summer. Selected information on the operations of the companies over the past three years is as follows: Year 20x2 20x3 20X4 Summer Company Sales to Parade Corp. Net Income $200,000 $100,000 175,000 90,000 225,000 160,000 Parade Corporation Inventory, Dec. 31 Operating Income $ 70,000 $150,000 105,000 240,000 120,000 300,000 Parade acquired 60 percent of the ownership of Summer on January 1, 20X1, at underlying book value. Required: Compute consolidated net income and income assigned to the controlling interest for 20X2, 20X3, and 20X4. Answer is complete but not entirely correct. 20X2 20X3 20X4 Consolidated net income $ 236,000 $ 201,600 $ 323,000 $ 457,000 $ 295,400 X $ 402,600 Income assigned to the controlling interest