During the current period, a subsidiary entity sold inventories to a parent entity for $41000. The inventorieshad previously cost the subsidiary entity $27000. By reporting date the parent entity had sold 10% ofinventories to a party outside the group. The company tax rate is 30%. The adjustment entry in theconsolidation worksheet at reporting date is:Note: Enter your answers correct to the nearest dollar.Answer: (No answer given)(No answer given) = $(No answer given)(No answer given) = $(No answer given)(No answer given) = $(No answer given)(No answer given) = $(No answer given)÷(No answer given) = $

The profit on intra-group transactions is calculated as the difference between the selling price and…

Answered: During the current period, a subsidiary…

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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On June 30, Pronghorn Corp discontinued its operations in Mexico. During the year, the operating income was $270,000 before taxes. On September 1, Pronghorn disposed of the Mexico facility at a pretax loss of $670,000. The applicable tax rate is 30%. Show the discontinued operations section of Pronghorn’s income statement. PRONGHORN CORPPartial Income Statement select an opening section name enter an income statement item $enter a dollar amount enter an income statement item $enter a dollar amount $enter a total dollar amount
(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 appropriate consolidation adjustment entries are as follows: Sales Dr 15,000 Cost of Sales Cr 1300 Inventory Cr 2,000 Deferred Tax Asset Dr 300Income Tax Expense Cr 300 Required(i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry. (ii)Determine the consolidation worksheet entries in the following year, assuming the inventory has 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…
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 appropriate consolidation adjustment entries are as follows: Sales DR 15000 Cost of Sales CR 13000 Inventory Deferred CR 2000 Deferred Tax Asset DR 300 Income tax expenses CR 300 (i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry. (ii)Determine the consolidation worksheet entries in the following year, assuming the inventory has 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 book was $600000 (costs $900000, accumulated depreciation $300000). This plant has a…
31 and are shown in the table given below. The following items were overlooked when the statements were prepared: • The Year 5 gain on sale of assets resulted from the subsidiary selling equipment to the parent on September 30. The parent immediately leased the equipment back to the subsidiary at an annual rental of $13,200. This was the only intercompany rent transaction that occurred each year. The equipment had a remaining life of five years on the date of the intercompany sale. The Year 6 gain on sale of assets resulted from the January 1 sale of a building, with a remaining life of seven years, by the subsidiary to the parent. • Both gains were taxed at a rate of 40%. CONSOLIDATED INCOME STATEMENTS Year 5 $ 755,000 8,800 3,300 Miscellaneous revenues Gain on sale of assets Rental revenue Miscellaneous expenses Rental expense Depreciation expense Income tax expense Non-controlling interest Net income NCI Required: Prepare correct consolidated income statements for Years 5 and 6.…

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