(Solution) - Pal Company acquired an 80 percent interest in Sal Corporation -(2025 Original AI-Free Solution)

Paper Details

Pal Company acquired an 80 percent interest in Sal Corporation at book value equal to fair value on January 1, 2011.
During the year, Sal sold $100,000 inventory items to Pal, and at December 31, 2011, unrealized profits amounted to $30,000. Separate incomes of Pal and Sal for 2011 were $500,000 and $300,000, respectively.
REQUIRED
1. Determine consolidated net income for Pal Company and Subsidiary under the parent-company theory of consolidation.
2. Determine total consolidated income for Pal Company and Subsidiary, income to controlling stockholders, and income to noncontrolling stockholders under the entity theory of consolidation.