Question

1) Which of the following is the most correct statement? A) All sales of inventory by...

1) Which of the following is the most correct statement?

A) All sales of inventory by subsidiary to parent are downstream.

B) Sales of depreciable assets are always upstream.

C) It does not matter for the consolidation process whether depreciable asset sales are upstream or downstream.

D) Sales of inventory by parent to subsidiary are downstream.

E) Upstream and downstream depreciable asset sales never take place in the year the parent acquires any part of the subsidiary.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

A) All sales of inventory by subsidiary to parent are downstream.

ANS : WRONG, BECAUSE IN DOWNSTREAM - PARENT SELLS TO SUBSIDIARY (NOT SUBSIDIARY TO PARENT)

B) Sales of depreciable assets are always upstream.

ANS : WRONG, Sale of depreciable assets can be downstream also.

C) It does not matter for the consolidation process whether depreciable asset sales are upstream or downstream.

ANS :WRONG, it does matters as it affects the consolidation process accordingly.

D) Sales of inventory by parent to subsidiary are downstream.

ANS : CORRECT, if parent sells to subsidiary it is downstream.

E) Upstream and downstream depreciable asset sales never take place in the year the parent acquires any part of the subsidiary.

ANS : WRONG.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Preparing a consolidated income statement—Equity method with noncontrolling interest, AAP and upstream and downstream intercompany inventory...
Preparing a consolidated income statement—Equity method with noncontrolling interest, AAP and upstream and downstream intercompany inventory profits A parent company purchased a 70% controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $700,000 in excess of the subsidiary’s Stockholders’ Equity on the acquisition date. This excess was assigned to a building that was estimated to be undervalued by $400,000 and to an unrecorded patent valued at $300,000. The building asset...
Which of the following statements is always correct regarding assets acquired by a newly-formed partnership? If...
Which of the following statements is always correct regarding assets acquired by a newly-formed partnership? If a partner contributes: a.         Equipment that is depreciable trade or business property (in the partner’s hands): the partnership treats the property as new property, and may claim a § 179 deduction. b.         Unrealized (in the cash-basis partner’s hands) receivables: the partnership will report ordinary income when the receivable is collected. c.         Inventory (in the partner’s hands): the partnership reports ordinary income whenever the property...
Which of the following statements is most correct? a. It is more important to adjust the...
Which of the following statements is most correct? a. It is more important to adjust the Debt/Assets ratio than the inventory turnover ratio to account for seasonal fluctuations b. An increase in the DSO, other things held constant, would generally lead to an increase in the ROE c. In a competitive economy, where all firms earn similar returns on equity, one would expect to find lower profit margins for airlines, which require a lot of fixed assets relative to sales,...
Consolidation subsequent to date of acquisition—Equity method with noncontrolling interest , AAP and gain on upstream...
Consolidation subsequent to date of acquisition—Equity method with noncontrolling interest , AAP and gain on upstream intercompany equipment sale A parent company acquired its 75% interest in its subsidiary on January 1, 2011. On the acquisition date, the total fair value of the controlling interest and the noncontrolling interest was $350,000 in excess of the book value of the subsidiary’s Stockholders’ Equity. All of that excess was allocated to a Royalty Agreement, which had a zero book value in the...
.1. Which of the following is not a correct statement about accounting? a. Generally accepted accounting...
.1. Which of the following is not a correct statement about accounting? a. Generally accepted accounting principles (GAAP) is a set of accounting standards used in the preparation of financial statements. b. Financial Accounting Standards Board (FASB) is a private organization delegated by the Federal Reserve with the responsibility to establish the GAAP. c. Management accountants work with a business or nonprofit organizations, preparing reports and analyzing financial info. d. Public accountants provide a variety of accounting services for clients...
Which of the following statements is most correct? a. If a company which produces military equipment...
Which of the following statements is most correct? a. If a company which produces military equipment merges with a company which manages a chain of motels, this is an example of a horizontal merger. b. If a company which produces gasoline and oil products merges with a company which manages a chain of gas stations, this is an example of a vertical merger. c. If a company buys a firm that is not in the same industry, this is an...
accounting question QUESTION 3 Part A (a) There is one asset that appears in the consolidated...
accounting question QUESTION 3 Part A (a) There is one asset that appears in the consolidated balance sheet of the group but probably does not appear in the parent entity’s or subsidiary entity’s separate financial statements, and there is also one asset that will appear in the balance sheet of the parent entity but will not appear in the consolidated financial statements. Name these two assets. (b) What is the primary criterion for determining whether or not to consolidate an...
1- Which of the following is false regarding a perpetual inventory system? a.Physical counts of ending...
1- Which of the following is false regarding a perpetual inventory system? a.Physical counts of ending inventory are not needed since inventory records are maintained on transaction-by-transaction basis. b. The balance in the inventory account is updated with each inventory purchase and sale transaction c.Cost of goods sold is increased(recorded) as sales are recorded. d. Inventory shrinkage loss can be detected, if any, when physical counts on inventory are conducted. 2- Jiro Industries uses straight-line depreciation for all of its...
1. Consider the following information from Snuggie Corp.'s most recent Income Statement. Net Sales were $924,...
1. Consider the following information from Snuggie Corp.'s most recent Income Statement. Net Sales were $924, Operating Costs (excluding depreciation) were $270, and Depreciation and Amortization Expense was $155. The firm's Interest Expense for the year was $80, and the firm's marginal tax rate is 35%. The firm's Operating Cash Flow for the year is $_____________. 2. Schnucki Corp's. Operating Cash Flow for 2011 was $1225 and its Depreciation Expense for 2011 was $242. On 12/31/10 the balance in the...
Which of the following statements is CORRECT? Select one: a. The days sales outstanding ratio tells...
Which of the following statements is CORRECT? Select one: a. The days sales outstanding ratio tells us how long it takes, on average, to collect after a sale is made. The account collection period (ACP) can be compared with the firm's credit terms to get an idea of whether customers are paying on time. Last year Harrington Inc. had sales of $325,000 and a net income of $19,000, and its year-end assets were $250,000. The firm's total-debt-to-total-assets ratio was 67.5%....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT