On January 1,2014,Palling Corporation Purchased 70% of the Common Stock

question 35

Essay

On January 1,2014,Palling Corporation purchased 70% of the common stock of Sam's Storage Systems for $320,000 when Sam's had Common Stock outstanding of $100,000 and Retained Earnings of $200,000.Any excess differential was attributed to goodwill.
At the end of 2014,Palling and Sam's had unrealized inventory profits from intercompany sales of $6,000 and $8,000,respectively.These year-end profit amounts were realized in 2015.At the end of 2015,Palling held inventory acquired from Sam's with a $10,000 unrealized profit.Palling reported separate income of $100,000 for 2015 and paid dividends of $30,000.Sam's reported separate income of $70,000 for 2015 and paid dividends of $20,000.
Required:
Compute the controlling interest share of consolidated net income for 2015.

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Definitions:

Identified to the Contract

Refers to goods that have been designated as the subject matter of a sales or service contract.

Insurable Interest

A stake in the preservation of a person or property that is sufficiently substantial to justify purchasing insurance.

Risk Exposure

The degree of vulnerability to potential financial loss in business operations or investments.

Damage or Destruction

The physical harm or ruin caused to property, environments, or items, which can impact their value, function, or usability.