243.Subject : - Accounting Various Intercompany TransactionsIn 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$4,000,0002,400,0002,200,0001,200,0001,050,000LandMerchandise InventoryEquipmentThe 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 2023between 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).DescriptionDebitTo 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 depreciationTTo eliminate excess depreciation expense.♦Accumulated depreciationTo restate the asset and accumulated depreciation accounts.♦44→♦♦4To eliminate unconfirmed gain on Intercompany transfer of equipment.♦♦→00000000OOO000000Credit00000000OOO0000000

Intercompany transactions are those transactions which are of two different organizations but falls…

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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