Abbot Company purchased 80% of Costello Company on January 1, 20X1 The purchase price paid was $600,000. On that day, the book value of Costello. was $500,000. Excess of cost over book value is due to goodwill.
Extracted text: Included in Costello's income are intercompany sales to Abbot of 40,000 with a cost to Costello of $25,000. 30% of this inventory is on hand in the Abbot inventory at December 31, 20X3. In addition, inventory sold at a profit of $5,000 was in the inventory of Abbot at December 31, 20X2. Complete the consolidation worksheet. First, complete the financial statements below. Below are the balances of accounts of Abbot and Costello at December 31, 20X3. Consolidation Entries Consolidated Bal. Abbot Costello Dr. Cr. Sales $50,000 $250,000 Expenses $30,000 $150,000 Income from S. Income $100,000 NCI Controlling Interest Retained Earnings Jan 1, 10 $700,000 $190,000 Dividends 100,000 Retained Earnings Dec 31, 10 $290,000 Cash $120,000 $30,000 Receivables 90,000 70,000 Inventory 100,000 100,000 Equipment (net) 100,000 350,000 Patents 50,000 Investment in Costello 796,400 Goodwill Land 100,000 100,000 Building (net) 120,000 100,000 $1,426,400 $800,000