A parent company purchased an 80% interest in its subsidiary several years ago with no AAP (i.e., purchased at book value). Each reports the following income statement for t Parent Subsidiary Income statement: Sales $25,000,000 $3,750,000 Cost of goods sold 17,500,000 2,250,000 Gross profit 7,500,000 1,500,000 420,000 Income (loss) from subsidiary 0 Operating expenses 4,750,000 975,000 Net income $3,170,000 $525,000 a. Compute the Income (loss) from subsidiary of $420,000 reported by the parent company. + $ 0 ♦ 0% Income (loss) from subsidiary $ 0 b. Prepare the consolidated income statement for the current year. Do not use negative signs with your answers. Consolidated Income Statement Sales 0 Cost of goods sold 0 Gross profit 0 0 Income (loss) from subsidiary Operating expenses 0 ♦ + f the question 0 0 0

A parent company purchased an 80% interest in its subsidiary several years ago with no AAP (i.e., purchased at book value). Each reports the following income statement for t Parent Subsidiary Income statement: Sales $25,000,000 $3,750,000 Cost of goods sold 17,500,000 2,250,000 Gross profit 7,500,000 1,500,000 420,000 Income (loss) from subsidiary 0 Operating expenses 4,750,000 975,000 Net income $3,170,000 $525,000 a. Compute the Income (loss) from subsidiary of $420,000 reported by the parent company. + $ 0 ♦ 0% Income (loss) from subsidiary $ 0 b. Prepare the consolidated income statement for the current year. Do not use negative signs with your answers. Consolidated Income Statement Sales 0 Cost of goods sold 0 Gross profit 0 0 Income (loss) from subsidiary Operating expenses 0 ♦ + f the question 0 0 0

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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H has a 75% owned subsidiary S. During the year ending 31 December 2021 H sold inventory to S for an invoice price of £800,000. S have since sold 75% of that inventory to third parties. The sale was at a mark-up of 25%on cost to H. S is the only subsidiary of H. What is the adjustment to inventory that would be included in the consolidated statement of financial position of H at the year-ending 31 December 2021 resulting from this sale? Show you calculations.
ABC-DEF
Intercompany sales from P to S for 2004 and 2005 are summarized Separate incomes of P Corporation and S Co. for 2005 are as at a time when S Co.'s book values and fair values were equal. P Corporation acquired 70% of the voting common shares of S Co. Sales Cost of goods sold Operating expenses Separate incomes P Corporation P 700,000 400,000 120,000 P 180,000 S Corporation P 400,000 200,000 100,000 P 100,000 as follows: Unsold at Selling price year- end 40% Cost Intercompany sales - 2004 P 250,000 P 390,000 Intercompany sales - 2005 175,000 50% 275,000 ww 12) The 2005 consolidated statement of comprehensive income wll show sales revenue and: a. P825,000 b. P900,000 c. P750,000 d. P625,000 13) The 2005 consolidated statement of comprehensive income will show cost of goods sold of: • a. P319,000 b. P340,000 c. P350,000 d. P400,000
Tanton plc is the parent company of Ruckus plc. Tanton sold its inventory to Ruckus for a price of £14,000. Tanton had held such inventory on its statement of financial position at a cost of £10,000. By the end of the financial year, Ruckus still held £2,800 of that inventory on its statement of financial position. How much unrealised profit should be cancelled on consolidation? a. Zero b. £400 c. £800 d. £2,800 e. £4,000
Archie Co. has a subsidiary, which is accounted for in its separate financial statements using the cost method. At the end of 2016, the company reports net income of $20,000 in its separate financial statements. Increase in fair value of investment $12,000 Share in net income of subsidiary $4,000 Cash dividends paid by subsidiary and received by the company $3,500 Assuming it has no other subsidiaries and other transactions affecting the net income at a consolidated level, compute the net income of the company at a consolidate level.
Preparing a consolidated income statement - with noncontrolling interest, but no AAP or intercompany profits A parent company purchased an 80% interest in its subsidiary several years ago with no AAP (i.e., purchased at book value). Each reports the following income statement for the current year. Parent Subsidiary Income statement: Sales Cost of goods sold Gross profit Income (loss) from subsidiary Operating expenses Net income Income (loss) from subsidiary $7,500,000 $1,125,000 (5,250,000) (675,000) 2,250,000 450,000 126,000 (1,425,000) $951,000 Sales Cost of goods sold Gross profit Income (loss) from subsidiary Operating expenses 0 a. Compute the income (loss) from subsidiary of $126,000 reported by the parent company. (292,500) $157,500 b. Prepare the consolidated income statement for the current year. Do not use negative signs with your answers. Consolidated Income Statement S 0 $ 0 0 0 0 0 0 0 0
(a) Jessica Ltd sold inventory during the current period to its wholly owned subsidiary, Amelie Ltd, for $15 000. These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for$8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriate consolidation adjustment entries are as follows: Sales Dr 15,000 Cost of Sales Cr 1300 Inventory Cr 2,000 Deferred Tax Asset Dr 300Income Tax Expense Cr 300 Required(i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry. (ii)Determine the consolidation worksheet entries in the following year, assuming the inventory has been –sold, and explain the adjustments on a line-by-line basis. (b) On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000 when…
a) 7,650b) 6,150c) 6,000d) 7,500
How much is the non-controlling interest in profit of Subsidiary Company on December 31, 2x19?
For the year ended December 31, the following results were given: Dividend Paid Net Income Parent Company P15,000 P30,200Subsidiary Company 4,000 9,400 Using the proportionate basis or partial goodwill method, compute the non-controlling interest on December 31.A. P 0 C. P 610B. P 540 D. P 940 Note: Just use the information provided to arrive at the answer.