Gross Profit Rate Remaining Inventory Intra-Entity Gross Profit Intra-Entity Gross Profit - Inventory 12/31/24 Gross Profit Gross Profit Rate Remaining Inventory Intra-Entity Gross Profit Impact of Intra-Entity Building Transfer: 12/31/23-Transfer price figures Transfer price Gain on transfer Depreciation expense Accumulated depreciation 12/31/24-Transfer price figures Depreciation expense Accumulated depreciation Allison Corporation acquired 90 percent of Bretton on January 1, 2022. Of Bretton's total acquisition-date fair value, $60,000 was allocated to undervalued equipment (with a 10-year remaining life) and $80,000 was attributed to franchises (to be written off over a 20-year period). Since the takeover, Bretton has transferred inventory to its parent as follows: Year 2022 2023 2024 Remaining at Year-End Cost $45,000 48,000 Transfer Price (at transfer price) 69,000 $90,000 80,000 92,000 $30,000 35,000 50,000 On January 1, 2023, Allison sold Bretton a building for $50,000 that had originally cost $70,000 but had only a $30,000 book value at the date of transfer. The building is estimated to have a five-year remaining life (straight-line depreciation is used with no salvage value). Selected figures from the December 31, 2024, trial balance of these two companies are as follows: Sales Cost of Goods Sold Operating Expenses Investment Income Inventory Equipment (net) Buildings (net) Required: Allison $700,000 Bretton $400,000 440,000 220,000 120,000 80,000 Not Given 0 210,000 90,000 140,000 110,000 350,000 190,000
Gross Profit Rate Remaining Inventory Intra-Entity Gross Profit Intra-Entity Gross Profit - Inventory 12/31/24 Gross Profit Gross Profit Rate Remaining Inventory Intra-Entity Gross Profit Impact of Intra-Entity Building Transfer: 12/31/23-Transfer price figures Transfer price Gain on transfer Depreciation expense Accumulated depreciation 12/31/24-Transfer price figures Depreciation expense Accumulated depreciation Allison Corporation acquired 90 percent of Bretton on January 1, 2022. Of Bretton's total acquisition-date fair value, $60,000 was allocated to undervalued equipment (with a 10-year remaining life) and $80,000 was attributed to franchises (to be written off over a 20-year period). Since the takeover, Bretton has transferred inventory to its parent as follows: Year 2022 2023 2024 Remaining at Year-End Cost $45,000 48,000 Transfer Price (at transfer price) 69,000 $90,000 80,000 92,000 $30,000 35,000 50,000 On January 1, 2023, Allison sold Bretton a building for $50,000 that had originally cost $70,000 but had only a $30,000 book value at the date of transfer. The building is estimated to have a five-year remaining life (straight-line depreciation is used with no salvage value). Selected figures from the December 31, 2024, trial balance of these two companies are as follows: Sales Cost of Goods Sold Operating Expenses Investment Income Inventory Equipment (net) Buildings (net) Required: Allison $700,000 Bretton $400,000 440,000 220,000 120,000 80,000 Not Given 0 210,000 90,000 140,000 110,000 350,000 190,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Gross Profit Rate
Remaining Inventory
Intra-Entity Gross Profit
Intra-Entity Gross Profit - Inventory 12/31/24
Gross Profit
Gross Profit Rate
Remaining Inventory
Intra-Entity Gross Profit
Impact of Intra-Entity Building Transfer:
12/31/23-Transfer price figures
Transfer price
Gain on transfer
Depreciation expense
Accumulated depreciation
12/31/24-Transfer price figures
Depreciation expense
Accumulated depreciation
Transcribed Image Text:Allison Corporation acquired 90 percent of Bretton on January 1, 2022. Of Bretton's total acquisition-date fair value, $60,000 was
allocated to undervalued equipment (with a 10-year remaining life) and $80,000 was attributed to franchises (to be written off over a
20-year period).
Since the takeover, Bretton has transferred inventory to its parent as follows:
Year
2022
2023
2024
Remaining at Year-End
Cost
$45,000
48,000
Transfer Price
(at transfer price)
69,000
$90,000
80,000
92,000
$30,000
35,000
50,000
On January 1, 2023, Allison sold Bretton a building for $50,000 that had originally cost $70,000 but had only a $30,000 book value at
the date of transfer. The building is estimated to have a five-year remaining life (straight-line depreciation is used with no salvage
value).
Selected figures from the December 31, 2024, trial balance of these two companies are as follows:
Sales
Cost of Goods Sold
Operating Expenses
Investment Income
Inventory
Equipment (net)
Buildings (net)
Required:
Allison
$700,000
Bretton
$400,000
440,000
220,000
120,000
80,000
Not Given
0
210,000
90,000
140,000
110,000
350,000
190,000
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