Corn Corporation purchased inventory from Beef Corporation for P 120,000 on September 20, 2012, and resold 80% of the purchased inventory to unaffiliated companies prior to December 31, 2012, for P140,000. Beef produced the inventory sold to Lorn for P75,000. Lorn owns 70% of Beef's voting common stock. The companies had no other transactions during 2012.

Corn Corporation purchased inventory from Beef Corporation for P 120,000 on September 20, 2012, and resold 80% of the purchased inventory to unaffiliated companies prior to December 31, 2012, for P140,000. Beef produced the inventory sold to Lorn for P75,000. Lorn owns 70% of Beef's voting common stock. The companies had no other transactions during 2012.

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

CONS Group complies with IFRS 10 by consolidating the parent's financial statements at date December 31 with subsidiaries' financial statements at date June 30. Select one: True False
Intra-group transaction Question (worksheet adjustment entries for the following independent transactions) Sydney Ltd owns all of the shares of Mel Ltd. In relation to the following intragroup transactions, all parts of which are independent unless specified, prepare the consolidation worksheet adjusting entries for preparation of the consolidated financial statements as at 30 June 2019. Assume an income tax rate of 30%. (a) SYD Ltd sold inventory to MEL Ltd on 1 September 2018 for $30 000. This inventory had cost SYD Ltd $18 000. One-third of the inventory was sold by Mel Ltd to QLD Ltd for $14 000 and one-third to ADL Ltd for $14 200. (b) SYD Ltd manufactures certain items which it then markets through MEL Ltd. During the current period, SYD Ltd sold items for $60 000 to MEL Ltd at cost plus 20%. MEL Ltd has sold 75% of these transferred items at 30 June 2019. (c) During June 2019, MEL Ltd declared a $3000 dividend. The dividend was paid in August 2020. (d) In…
What is the journal entry for Subsidiary if it sold an inventory bought at $300 to its Parent company at a price of $200?
12
On 5 June 2022, a parent entity sold inventories to a subsidiary entity for $80. The inventories had previously cost the parent entity $72. All the inventories are still held by the subsidiary at reporting date, 30 June 2022. Ignoring tax effects, the adjustment entry in the consolidation worksheet at reporting date is: a. Sales revenue O b. O C. Cost of sales Inventories Cash Sales revenue Cost of sales Inventories Sales revenue Cost of sales Inventories d. Sales revenue Cash Inventories Cost of sales Dr Ä ÄÄ Ä ÄJÄJ Cr Cr Dr Cr Dr Cr Dr Cr Cr Dr Cr Dr Cr 80 000 72 000 72 000 80 000 72 000 72 000 8 000 72 000 72 000 72 000 72 000 8 000 72 000 72 000
At December 31, 2023, Sandhill Corp's general ledger includes the following account balances: Copyrights $52500 Deposits with advertising agency (will be used to promote goodwill) 43000 Discount on bonds payable 74000 Excess of cost over fair value of identifiable net assets of acquired subsidiary 589500 Trademarks 106000 In the preparation of Sandhill's balance sheet as of December 31, 2023, what should be reported as total intangible assets? O $158500 O $748000 $791000 O $822000
Assuming that the quasi reorganization shall be accomplished as follows: Property, plant and equipment are to be reduced to their fair market value of P800,000. Inventories are to be written down by P50,000. • Unaccrued obligation shall be recognized at P150,000. • The par value of ordinary Shares will be reduced to P5. 1. What is the balance of the retained earnings account as of 31 December 2019? Assuming that the quasi reorganization shall be accomplished as follows: Property, plant and equipment are to be reduced to their fair market value of P800,000. Inventories are to be written down by P50,000. • Unaccrued obligation shall be recognized at P150,000. • The par value of ordinary Shares will be reduced to P5. 2. What is the balance of the retained earnings account as of 31 December 2019?
Please answer requirement 1 - 9
Explain why consolidated entities defer intra-entity gross profit in ending inventory and the consolidation procedures required subsequently to recognize profits.