Answered: During 20x9, PP Corporation recorded…

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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Similar questions

(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 appropriateconsolidation adjustment entries are as follows: Dr Sales 15,000 Cr Cost of Sales 13,000Cr Inventory 2,000 Dr Deferred Tax Asset 300Cr Income Tax Exp 300Required(i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basisthe correct adjustment entry. (ii)Determine the consolidation worksheet entries in the following year, assuming the inventoryhas 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 its’ carrying value in Liala Ltd bookwas $600000 (costs $900000, accumulated depreciation $300000). This…
PROBLEM 4: The records of ZZZ Company reveal the following information: A. Goods sold on an installment basis to Luxembourg, Inc., possession of the goods is transferred to Hatred, Inc., P750,000. B Goods sold to Madrid Company for which ZZZ has signed an agreement to repurchasethe goods sold at a set price that covers all costs related to the inventory, P680,000. C. Goods received from YYY Company for which an agreement was signed requiringZZZ to replace such goods in the near future, P580,000. C. Goods purchased from Male, Inc., P430,000. Billing was received although delivery was delayed per request of ZZZ. The goods purchased were segregated and ready for delivery on demand. D. Goods purchased from Managua on a lay away sale agreement, P550,000. The goods were not yet delivered until after ZZZ makes the final payment on the purchase price. ZZZ made total payments of P50,000 during the year. How much is included by ZZZ as part of inventory?

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