E 5-7 Downstream sale of inventory

Xuma SA was a subsidiary of Fabian SA. Fabian SA had a policy to sell its merchandise at a mark-up of
10 percent. The beginning balance of Xuma’s inventory in 2014, which was sold in the current year,
was $220,000. Half of this beginning inventory included merchandise purchased from Fabian SA.
During 2014, Fabian SA sold merchandises to Xuma SA for $550,000. Xuma has sold $440,000 of these
merchandises to the third parties. The data of the sales and the cost of sales for both companies are
as follows:

Fabian SA Xuma SA

Sales $2,200,000 $1,700,000

Cost of Sales $2,000,000 $1,500,000

REQuIRED

1. What is the amount of sales that should appear on the consolidated income statement?

Penyesuaian BI:

Investasi 10k

COGS 10k

(realisasi dari URP yg sebelumnya ditunfa pada BI)

2. What is the cost of sales that should appear on the consolidated income statement?

Sales 550k

COGS 550K

(eliminasi penjualan intercompany th 2014)

COGS 10k

Inventory 10k

(menunda atau mendefer URP pada EI)

1. Fabian SA sales $2,200,000

Xuma SA sales $1,700,000

Less: Intercompany sales ($550,000)
Consolidated sales for Fabian SA and subsidiary $3,350,000

2. Fabian SA cost of sales $2,000,000

Xuma SA cost of sales $1,500,000

Realized profit from beginning inventory ($ 20,000)
($220,000 x 10 / 110)
Unrealized profit from ending inventory $ 10,000
(($550,000 - $440,000) x 10 /110)
Consolidated cost of sales for Fabian SA and subsidiary $3,490,000
 Dari Bu Zuni

Fabian SA cost of sales $2,000,000

Xuma SA cost of sales $1,500,000

($ 10,000)
550,000
Unrealized profit from ending inventory $ 10,000
(($550,000 - $440,000) x 10 /110)
Consolidated cost of sales for Fabian SA and subsidiary $2,950,000

E 5-8 Downstream sale of inventory

Wikan Tbk acquired 80 percent ownership of Budi Tbk several years ago at book value. During 2014,
Wikan Tbk sold merchandise to Budi Tbk for $1,000,000 at a gross profit of 20 percent. Budi Tbk sold
90 percent of this merchandise to outside parties. At the end of the year, Budi Tbk reported a net
income of $400,000.

REQuIRED

1. Determine income from Budi Tbk for 2014.

Intercompany sales 1200k

Cost 1000k

Gross profit 200k

Sebesar 10% belum terjual ke pihak luar. URP = 10%*200k = 20k

1) Laba utk induk = (80%*400k)) - 20k = $300k

2) Laba utk NCI (NCI Share) = 20% * 400k = 80k

3) Laba konsolidasian -> tdk ada info mengenai laba induk

Jika upstream -> laba dari induk

anak

2. Determine noncontrolling interest share for 2014.

1. 80% of $400,000 Budi Tbk’s net income $320,000

Unrealized profit from ending inventory ($20,000)
($1,000,000 x 20% x 10%)
 Income from Budi Tbk for 2014 $300,000

2. Noncontrolling interest share for 2014:

20% of $400,000 Budi Tbk net income $ 80,000