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b. Repeat part a assuming that all of the above unconfirmed intercompany profits arose from downstream sales. Enter answers using all zeros (do not abbreviate answers to millions or thousands). Description Debit To eliminate intercompany profit from sale of land. To eliminate Intercompany profit in beginning inventory. To eliminate intercompany sales and purchases. To eliminate intercompany profit in ending Inventory. Accumulated depreciation + ⇓⇓ 4 ♦ 4 ♦ O A 0 0 0 0 0 0 0 0 OOC 0 0 0 Credit 0 0 0 OO 0 0 0 OOC 0

b. Repeat part a assuming that all of the above unconfirmed intercompany profits arose from downstream sales. Enter answers using all zeros (do not abbreviate answers to millions or thousands). Description Debit To eliminate intercompany profit from sale of land. To eliminate Intercompany profit in beginning inventory. To eliminate intercompany sales and purchases. To eliminate intercompany profit in ending Inventory. Accumulated depreciation + ⇓⇓ 4 ♦ 4 ♦ O A 0 0 0 0 0 0 0 0 OOC 0 0 0 Credit 0 0 0 OO 0 0 0 OOC 0

FINANCIAL ACCOUNTING
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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243.

Subject : - Accounting 

 

Various Intercompany Transactions In consolidation of Perpetual Industries and Sand Hill Company at December 31, 2023, you assemble the following data related to unconfirmed intercompany profits: January 1, 2023 December 31, 2023 $4,000,000 $4,000,000 2,400,000 2,200,000 1,200,000 1,050,000 Land Merchandise Inventory Equipment The equipment is carried on the purchasing affiliate's books at a cost of $6,000,000 and accumulated depreciation of $1,800,000 (straight-line, no salvage value) at December 31, 2023. Accumulated depreciation at the date of intercompany sale was $1,000,000; the original intercompany gain was $1,500,000. Intercompany merchandise sales for 2023 between Perpetual and Sand Hill were $40,000,000.
Transcribed Image Text:Various Intercompany Transactions In consolidation of Perpetual Industries and Sand Hill Company at December 31, 2023, you assemble the following data related to unconfirmed intercompany profits: January 1, 2023 December 31, 2023 $4,000,000 $4,000,000 2,400,000 2,200,000 1,200,000 1,050,000 Land Merchandise Inventory Equipment The equipment is carried on the purchasing affiliate's books at a cost of $6,000,000 and accumulated depreciation of $1,800,000 (straight-line, no salvage value) at December 31, 2023. Accumulated depreciation at the date of intercompany sale was $1,000,000; the original intercompany gain was $1,500,000. Intercompany merchandise sales for 2023 between Perpetual and Sand Hill were $40,000,000.
b. Repeat part a assuming that all of the above unconfirmed intercompany profits arose from downstream sales. Enter answers using all zeros (do not abbreviate answers to millions or thousands). Description Debit To eliminate Intercompany profit from sale of land. To eliminate Intercompany profit in beginning inventory. To eliminate intercompany sales and purchases. To eliminate intercompany profit in ending Inventory. Accumulated depreciation TTo eliminate excess depreciation expense. ♦ Accumulated depreciation To restate the asset and accumulated depreciation accounts. ♦ 4 4 → ♦ ♦ 4 To eliminate unconfirmed gain on Intercompany transfer of equipment. ♦ ♦ → 0 0 0 0 0 0 0 0 OOO 0 0 0 0 0 0 Credit 0 0 0 0 0 0 0 0 OOO 0 0 0 0 0 0 0
Transcribed Image Text:b. Repeat part a assuming that all of the above unconfirmed intercompany profits arose from downstream sales. Enter answers using all zeros (do not abbreviate answers to millions or thousands). Description Debit To eliminate Intercompany profit from sale of land. To eliminate Intercompany profit in beginning inventory. To eliminate intercompany sales and purchases. To eliminate intercompany profit in ending Inventory. Accumulated depreciation TTo eliminate excess depreciation expense. ♦ Accumulated depreciation To restate the asset and accumulated depreciation accounts. ♦ 4 4 → ♦ ♦ 4 To eliminate unconfirmed gain on Intercompany transfer of equipment. ♦ ♦ → 0 0 0 0 0 0 0 0 OOO 0 0 0 0 0 0 Credit 0 0 0 0 0 0 0 0 OOO 0 0 0 0 0 0 0
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