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
What is the amount of gain or loss to be recognized by WAVY Company in its income statement as a result of reclassification? (If gain, leave the numerical figure positive; if loss, put a negative (-) sign before the numerical figure)
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
am. 105.
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.…
During 2020, Blue Company purchased inventory costing $80,000 and sold the inventory to its wholly-owned subsidiary, Red, for $100,000 before December 31, 2020. The following elimination entry in consolidation was made for profit deferred on intercompany inventory events: Sales 100,000 Cost of goods 80,000 Inventory 20,000 During 2021 all of the profit deferred on this intercompany inventory sale in 2020 was recognized when the inventory was sold to third parties for $120,000. What elimination entry is needed in consolidation in 2021?
15.
In 2022, parent company sells inventory costing $60,000 fo to its 90% owned Subsidiary for $100,000.The sale was on account.20% of the inventory remained unsold until the following year 2023. 40% of the receivable was uncollected.In 2021 the parent company sold inventory costing $52,000 for $80,000.The subsidiary sold all of the inventory in 2021. Explain the necessary 2022 elimination entries in detail.

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