Merchandise and ?xed asset sale. Peninsula Company owns an 80% controlling interest in the Sandbar Company. Sandbar regularly sells merchandise to Peninsula, which then sold to outside parties. The gross pro?t on all such sales is 40%. On January 1, 20X1, Peninsula sold land and a building to Sandbar. Tax assessments divide the value of the parcel 20% to land and 80% to structures. Pertinent information for the companies is summarized:
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Peninsula
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Sandbar
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Internally generated net income, 20X1 .
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$520,000
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$250,000
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Internally generated net income, 20X2 .
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340,000
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235,000
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Intercompany merchandise sales, 20X1
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100,000
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Intercompany merchandise sales, 20X2
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120,000
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Intercompany inventory, December 31, 20X1 .
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15,000
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Intercompany inventory, December 31, 20X2 .
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20,000
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Cost of real estate sold on January 1, 20X1 .
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600,000
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Sale price for real estate on January 1, 20X1
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800,000
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Depreciable life of building
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20 years
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Prepare income distribution schedules for 20X1 and 20X2 for Peninsula and Sandbar as they would be prepared to distribute income to the noncontrolling and controlling interests in support of consolidated worksheets.