Pepper Corporation owns 75 percent of Salt Company's voting shares. During 20X8, Pepper produced 50,000 chairs at a cost of $79 each and sold 35,000 chairs to Salt for $90 each. Salt sold 18,000 of the chairs to unaffiliated companies for $117 each prior to December 31, 20X8, and sold the remainder in early 20X9 to unaffiliated companies for $130 each. Both companies use perpetual inventory systems. Based on the information given above, what amount of cost of goods sold must be reported in the consolidated income statement for 20X8? Multiple Choice A. $1,422,000B. $2,963,000 C. $1,620,000 D. $2,765,000 Requlred InformationRMera Township reported the following data for Its governmental activitles for the year ended June 30, 20X9:Amount$1,000,ee0300, ee0ItemCash and cash equivalentSReceivablesCapital assetsAccumulated depreciationAccounts payableLong-tern 1iabilities8,500,8001,200, eee400, eee024,000,000Additional Information avallable is as follows:All of the long-term debt was used to acquire capital assets. Cash of $475,000 Is restricted for debt service.Based on the preceding Information, on the statement of net assets prepared at June 30, 20X9, what amount should be reported for net assets, unrestricted?Multiple Cholce$525,000$900,000$425,000$825,000

When one company acquired shares of another company then one company is parent company and other…

Answered: Pepper Corporation owns 75 percent of…

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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Jones Corporation switched from the LIFO method of costing inventories to the FIFO method at the beginning of 20X1. The LIFO inventory at the end of 20X0 would have been $80,000 higher using FIFO. Reported retained earnings at the end of 20X0 were $1,750,000. Jones’s tax rate is 21%. Tax law requires a company using LIFO for tax purposes to use it for financial reporting as well. So, when Jones changes from LIFO to FIFO, it will have to do the same for tax purposes. Further, Jones must recognize taxable income equal to the amount by which it increases the inventory valuation when it makes the change. As a result, Jones will pay tax on an additional $80,000 of taxable income in 20X1. Required: Calculate the balance in retained earnings at the time of the change (beginning of 20X1) as it would have been reported had FIFO been previously used. Prepare the journal entry to record the change in accounting principle at the beginning of 20X1.
The Peggy Company sold merchandise to its wholly owned subsidiary, Sally Company. The following information is available: Sale price to Sally $36,000 Cost to Peggy $27,000 Sally sold 70 % of the inventory to an outside customer for $25,200. Prepare the elimination journal entry. If the other 30% was sold to an outside customer during the next year and there was not any other inter-co transactions what would be the journal entry next year?
Patient Company holds 60% of Speedy Company stock. Patient has sold inventory to Speedy Company as follows: Percent of Sold Sales Inventory Cost to Price to Held at Speedy $203,000 $355,000 $208,000 $312,000 $120,000 $150,000 $150,000 $250,000 Year Patient Year end 2017 30% 2018 40% 2019 25% 2020 40% The following balances were included in the individual financial statements of each company for the year ended 12/31/2020: Speedy $ 5,500,000 3,800,000 $ 3,570,000 2,300,000 Patient Sales Cost of goods sold Merch. inventory 2$ 580,000 380,000 a. What will be reported as consolidated sales in the year 2020? b. What will be reported as consolidated inventory at 12/31/2020? c. What will be reported as consolidated cost of goods sold for 2020? d. Were the intra-entity sales of inventory items upstream or downstream?

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