1. Prepare all necessary 20x6 elimination entries relating to the intercompany sale of inventories PROBLEM 7Phlaire acquired 70 percent of Syanne on July 1, 20x5. Based on the purchase price, proportionate goodwill of P450,000 wasrecognized. The 20x6 financial statements are as follows:PhlaireSyanneIncome StatementP 1,200,000(802,500)(150,000)52,500300,000Sales900.000Cost of Goods Sold(600,000)(150,000)Operating ExpensesDividend Income-0-Net Income150.000Statement of Accumulated ProfitsP 1,275,000150,000( 75,000)P2.100,000 P 1,350,000Accumulated Profits, January 1, 2016P1,950,000Net Income300,000Dividends Paid(150,000)Accumulated Profits, December 31, 2016Statement of Financial PositionCash and ReceivablesP 600,000P 450,000InventoryInvestment in SyanneFixed Assets447,0001,353,0001,500,0001,050,000-0-900,000Accumulated Depreciation(450,000)P 3.450.000 P 2,100,000(300,000)Total AssetsLiabilitiesP 900,000P 600,000Ordinary shareAccumulated profitsTotal Liabilities and Equity450,0002,100 000P 3,450,000 P 2,100,000150,0001,350,000Phlaire sells inventory costing P108,000 to Syanne during 20x5 for P180,000. At year's end, 30 percent is left. Syanne sellsinventory costing P300,000 to Phlaire during 201x for P375,000. At year's end, 20 percent is left.

Given: To prepare the elimination entries of the intercompany sales of the inventories as,

Answered: Phlaire Syanne Income Statement P…

Phlaire Syanne Income Statement P 1,200,000 (802,500) (150,000) 52,500 P 900,000 (600,000) (150,000) -0- P 300,000 P 150,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

1. Prepare all necessary 20x6 elimination entries relating to the intercompany sale of inventories

PROBLEM 7
Phlaire acquired 70 percent of Syanne on July 1, 20x5. Based on the purchase price, proportionate goodwill of P450,000 was
recognized. The 20x6 financial statements are as follows:
Phlaire
Syanne
Income Statement
P 1,200,000
(802,500)
(150,000)
52,500
300,000
Sales
900.000
Cost of Goods Sold
(600,000)
(150,000)
Operating Expenses
Dividend Income
-0-
Net Income
150.000
Statement of Accumulated Profits
P 1,275,000
150,000
( 75,000)
P2.100,000 P 1,350,000
Accumulated Profits, January 1, 2016
P1,950,000
Net Income
300,000
Dividends Paid
(150,000)
Accumulated Profits, December 31, 2016
Statement of Financial Position
Cash and Receivables
P 600,000
P 450,000
Inventory
Investment in Syanne
Fixed Assets
447,000
1,353,000
1,500,000
1,050,000
-0-
900,000
Accumulated Depreciation
(450,000)
P 3.450.000 P 2,100,000
(300,000)
Total Assets
Liabilities
P 900,000
P 600,000
Ordinary share
Accumulated profits
Total Liabilities and Equity
450,000
2,100 000
P 3,450,000 P 2,100,000
150,000
1,350,000
Phlaire sells inventory costing P108,000 to Syanne during 20x5 for P180,000. At year's end, 30 percent is left. Syanne sells
inventory costing P300,000 to Phlaire during 201x for P375,000. At year's end, 20 percent is left.

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