A non-current asset with a carrying amount of $2400 was sold by the parent to its subsidiary for $1000 on 1January 2019. The subsidiary intended to use this item as inventory, being a seller of second-hand goods.Both entities charged depreciation at the rate of 25% p.a. on the diminishing balance on non-current assets.The item was still on hand at 30 June 2019. Assume an income tax rate of 30%. Prepare the consolidationworksheet adjusting entries for preparation of the consolidated financial statements as at 30 June 2019Answer: Loss on saleDr$ 1400Your last answer was interpreted as follows: 1400Inventory÷ CrYour last answer was interpreted as follows: 1400Accumulated depreciation÷ Dr$ 1400÷$ 350Your last answer was interpreted as follows: 350Depreciation Expense÷Cr÷$ 350Your last answer was interpreted as follows: 350

The first step in preparing the consolidation worksheet adjusting entries is to identify the…

Answered: A non-current asset with a carrying…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On April 1, 2020, Republic Company sold equipment to its wholly owned subsidiary, Barre Corporation, for $40,000. At the time of the transfer, the asset had an original cost (to Republic) of $60,000 and accumulated depreciation of $25,000. The equipment has a five year estimated remaining life. Barre reported net income of $250,000, $270,000 and $310,000 in 2020, 2021, and 2022, respectively. Republic received dividends from Barre of $90,000, $105,000 and $120,000 for 2020, 2021, and 2022, respectively. Assume that Republic uses the cost method to account for its investment in Barre. Compute the [ADJ] consolidating entry necessary for 2021. Select one: a. $155,750 b. $205,000 c. $320,750 d. $165,000 e. $245,750 x Your answer is incorrect. The correct answer is: $155,750
Compute for the consolidated cost of goods sold.
Robertson Company had purchased an equipment on January 1, 2019 for P 4,800,000. The entity used the straight-line method of depreciation based on a ten-year estimated useful life with no residual value. During 2022, the entity decided that the equipment would be used only three more years and then replaced with a technologically superior model. What entry should be made on January 1, 2022 to reflect the change? a. Debit other comprehensive income and credit accumulated depreciation, P 480,000. b. Debit depreciation and credit accumulated depreciation, P 560,000. c. Debit retained earnings and credit accumulated depreciation, P 480,000. d. No entry
please explain it
Ellen Company acquired all of Lil Wayne Corporation's assets and liabilities on June 30, 2021. Lil Wayne reported assets with a book value of $100,000 and liabilities of $55,000. Ellen noted that Lil Wayne included the amount $7,000 for an obsolete inventory at the acquisition date that did not appear to have any value. Ellen also determined that an old machine previously used by Lil Wayne had a fair value of $15,000 but had not been recorded by Lil Wayne. Except for machinery and equipment, all the other assets and liabilities of Lil Wayne approximated their fair values. In recording the transfer of assets and liabilities in its books, Ellen recorded a gain of $15,000 and paid $34,000 to acquire Lil Wayne's net assets. If the book value of Lil Wayne's machinery and equipment was $36,000, what was their fair value?
On September 1, 2019, Plant Co. acquired 75% interest in Zombie Co. On this date, Zombie's net identifiable assets have a carrying amount of ₱180,000, which approximates fair value. In December 2019, Zombie sold goods to Plant for ₱81,000. Zombie had marked up these goods by 50% based on cost. One-third of these goods remain unsold at year-end. The group assessed that there is no impairment loss on goodwill for the current year. The individual statements of profit or loss of the entities for the year ended December 31, 2019 are shown below: Plant Co. Zombie Co. Revenue 1,000,000 720,000 Cost of sales (400,000) (300,000) Gross profit 600,000 420,000 Distribution costs (200,000) (100,000) Administrative costs (80,000) (45,000) Profit before tax 320,000 275,000 Income tax expense (96,000) (95,000) Profit after tax 224,000 180,000 All of Zombie’s income and expenses (including profit from intercompany sale) were…
In 2022, parent company sells inventory costing $60,000 fo to its 90% owned Subsidiary for $100,000.The sale was on account.20% of the inventory remained unsold until the following year 2023. 40% of the receivable was uncollected.In 2021 the parent company sold inventory costing $52,000 for $80,000.The subsidiary sold all of the inventory in 2021. Explain the necessary 2022 elimination entries in detail.
An assert was purchased on 1st July 2017 for a cash price of MYR 205,000. It is a policy of the business to depreciate its asset using the reducing balance method at the rate of 15% per annum on a yearly basis. Calculate the asset’s net book value on 31st December 2019, assuming that the business closes its account on that date. Select one: a. MYR 174,250 b. MYR 125,895.63 c. MYR 137,004.06 d. MYR 125,960.50
Surgimed Ghana Ltd. acquired a property for GH¢4 million with annual depreciation of GH¢300,000 on the straight line basis. At the end of the previous financial year at 31st December, 2019, when accumulated depreciation was GH¢1 million, a further amount relating to an impairment loss of $350,000 was recognised, which resulted in the property being valued at its estimated value in use. On 1st May, 2020, as a consequence of a proposed move to new premises due to the COVID 19 restrictions, the property was classified as held for sale. At the time of classification as held for sale, the fair value less costs to sell was GH¢2·4 million. On 1st July, 2020, the property market had improved and the fair value less costs to sell was reassessed at GH¢2·52 million and at the year-end on the 31st December, 2020, it had improved even further, so that the fair value less costs to sell was GH¢2·95 million. The property was sold on 5th January, 2021 for GH¢3 million. Required The…
A company which prepares financial statements to 31 December classifies a non-current asset as held for sale on 1 SEPTEMBER 20X2. The asset's carrying amount at that date is $20,000 and its fair value is $15,600, with estimated costs to sell of $600. The asset is sold in June 20X3 for $16,000(net of costs). Calculate any impairment losses or gains that should be recognised in the company's statement of profit or loss for the year ended 31 December 20X2 if the asset's fair value less costs to sell at 31 December 20X2 is: a)14,000 b)17,000 c)22,000 In each case, also calculate the profit or loss that should be recognised on the disposal of the asset in 20X3 and comment on the results shown.
Comprehensive Information concerning Valnet Corporation's intangible assets is as follows: a. On January 1, 2019, Valnet signed an agreement to operate as a franchisee of Rapid Copy Service Inc. for an initial franchise fee of $94,000. Of this amount, $26,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $17,000 each beginning January 1, 2020. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 2, 2019, of the 4 annual payments discounted at 15% (the implicit rate for a loan of this type) is $48,500. The agreement also provides that 4% of the revenue from the franchise must be paid to the franchisor annually. Valnet's revenue from the franchise for 2019 was $920,000. Valnet estimates the useful life of the franchise to be 5 years. b. Valnet incurred $63,000 of experimental and development costs in its laboratory to develop a patent, which was…

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS