Company P holds 70 percent of the voting shares of Company S.
During 20X8, Company S...
Company P holds 70 percent of the voting shares of Company S.
During 20X8, Company S sold land with a book value of $125,000 to
Company P for $150,000. Company P continues to hold the land at the
end of the year. The companies file separate tax returns and are
subject to a 40 percent tax rate. Assume that Company P uses the
fully adjusted equity method in accounting for its investment in
Company S.
Use the information given, but...
Parent Company holds 75 percent of Surrogate Company’s voting
common shares. On December 31, 20X8, Parent...
Parent Company holds 75 percent of Surrogate Company’s voting
common shares. On December 31, 20X8, Parent recorded a loss of
$20,000 on the sale of equipment to Surrogate. At the time of the
sale, the equipment’s estimated remaining economic life was eight
years. Required: a. Will consolidated net income be increased or
decreased when consolidation entries associated with the sale of
equipment are made at December 31, 20X8? By what amount?
Pitcher Corporation purchased 60 percent of Softball
Corporation’s voting common stock on January 1, 20X1. On...
Pitcher Corporation purchased 60 percent of Softball
Corporation’s voting common stock on January 1, 20X1. On January 1,
20X5, Pitcher received $231,000 from Softball for a truck Pitcher
had purchased on January 1, 20X2, for $321,000. The truck is
expected to have a 10-year useful life and no salvage value. Both
companies depreciate trucks on a straight-line basis.
Required: a. Prepare the worksheet consolidation entry or
entries needed at December 31, 20X5, to remove the effects of the
intercompany sale....
Frazer Corporation purchased 60 percent of Minnow Corporation’s
voting common stock on January 1, 20X1. On...
Frazer Corporation purchased 60 percent of Minnow Corporation’s
voting common stock on January 1, 20X1. On January 1, 20X5, Frazer
received $225,000 from Minnow for a truck Frazer had purchased on
January 1, 20X2, for $275,000. The truck is expected to have a
10-year useful life and no salvage value. Both companies depreciate
trucks on a straight-line basis.
a. Prepare the worksheet consolidation entry or entries needed
at December 31, 20X5, to remove the effects of the intercompany
sale. (If...
Frazer Corporation purchased 60 percent of Minnow Corporation's
voting common stock on January 1, 20X1. On...
Frazer Corporation purchased 60 percent of Minnow Corporation's
voting common stock on January 1, 20X1. On January 1, 20X5, Frazer
received $225,000 from Minnow for a truck Frazer had purchased on
January 1, 20X2, for $295,000. The truck is expected to have a
10-year useful life and no salvage value. Both companies depreciate
trucks on a straight-line basis.
a. Prepare the worksheet consolidation entry or entries needed
at December 31, 20X5, to remove the effects of the intercompany
sale:
Record...
Able Company issued $930,000 of 10 percent first mortgage bonds
on January 1, 20X1, at 104....
Able Company issued $930,000 of 10 percent first mortgage bonds
on January 1, 20X1, at 104. The bonds mature in 20 years and pay
interest semiannually on January 1 and July 1. Prime Corporation
purchased $620,000 of Able’s bonds from the original purchaser on
December 31, 20X5, for $613,000. Prime owns 70 percent of Able’s
voting common stock.
a. Prepare the worksheet consolidation entry or entries needed
to remove the effects of the intercorporate bond ownership in
preparing consolidated financial...
Holiday Bakery owns 70 percent of Farmco Products Company’s
stock. On January 1, 20X9, inventory reported...
Holiday Bakery owns 70 percent of Farmco Products Company’s
stock. On January 1, 20X9, inventory reported by Holiday included
23,000 bags of flour purchased from Farmco at $21 per bag. By
December 31, 20X9, all the beginning inventory purchased from
Farmco Products had been baked into products and sold to customers
by Holiday. There were no transactions between Holiday and Farmco
during 20X9. Both Holiday Bakery and Farmco Products price their
sales at cost plus 50 percent markup for profit....
Jersey Corporation acquired 100 percent of Lime Company on
January 1, 20X7, for $201,000. The trial...
Jersey Corporation acquired 100 percent of Lime Company on
January 1, 20X7, for $201,000. The trial balances for the two
companies on December 31, 20X7, included the following amounts:
Jersey Corporation
Lime Company
Item
Debit
Credit
Debit
Credit
Cash
$
82,000
$
32,000
Accounts
Receivable
68,000
73,000
Inventory
174,000
119,000
Land
80,000
27,000
Buildings and
Equipment
491,000
153,000
Investment in Lime
Co. Stock
254,000
Cost of Goods
Sold
491,000
252,000
Depreciation
Expense
22,000
12,000
Other Expenses
69,000
69,000
Dividends
Declared...
Pilfer Company acquired 90 percent ownership of Scrooge
Corporation in 20X7, at underlying book value. On...
Pilfer Company acquired 90 percent ownership of Scrooge
Corporation in 20X7, at underlying book value. On that date, the
fair value of noncontrolling interest was equal to 10 percent of
the book value of Scrooge Corporation. Pilfer purchased inventory
from Scrooge for $90,000 on August 20, 20X8, and resold 70 percent
of the inventory to unaffiliated companies on December 1, 20X8, for
$100,000. Scrooge produced the inventory sold to Pilfer for
$67,000. The companies had no other transactions during 20X8....
Able Company issued $1,050,000 of 10 percent first mortgage
bonds on January 1, 20X1, at 104....
Able Company issued $1,050,000 of 10 percent first mortgage
bonds on January 1, 20X1, at 104. The bonds mature in 20 years and
pay interest semiannually on January 1 and July 1. Prime
Corporation purchased $700,000 of Able’s bonds from the original
purchaser on January 1, 20X5, for $697,800. Prime owns 70 percent
of Able’s voting common stock.
A. Prepare the worksheet consolidation entry or entries needed
to remove the effects of the intercorporate bond ownership in
preparing consolidated financial...