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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Prepare all necessary 20x6 elimination entries relating to the intercompany sale of inventories.

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
Sales
1,200,000
P
900,000
Cost of Goods Sold
(802,500)
(600,000)
(150,000)
52,500
300,000
Operating Expenses
(150,000)
Dividend Income
Net Income
P
150,000
Statement of Accumulated Profits
Accumulated Profits, January 1, 2016
1,950,000
1,275,000
Net Income
300,000
150,000
Dividends Paid
(150,000)
( 75,000)
Accumulated Profits, December 31, 2016
2,100,000
1,350,000
Statement of Financial Position
Cash and Receivables
600,000
P
450,000
Inventory
447,000
1,050,000
Investment in Syanne
1,353,000
Fixed Assets
1,500,000
900,000
Accumulated Depreciation
(450,000)
3,450,000
(300,000)
Total Assets
P
2,100,000
Liabilities
900,000
600,000
Ordinary share
450,000
150,000
Accumulated profits
Total Liabilities and Equity
2,100 000
1,350,000
3,450,000
P
2,100,000
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.
Transcribed Image Text: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 Sales 1,200,000 P 900,000 Cost of Goods Sold (802,500) (600,000) (150,000) 52,500 300,000 Operating Expenses (150,000) Dividend Income Net Income P 150,000 Statement of Accumulated Profits Accumulated Profits, January 1, 2016 1,950,000 1,275,000 Net Income 300,000 150,000 Dividends Paid (150,000) ( 75,000) Accumulated Profits, December 31, 2016 2,100,000 1,350,000 Statement of Financial Position Cash and Receivables 600,000 P 450,000 Inventory 447,000 1,050,000 Investment in Syanne 1,353,000 Fixed Assets 1,500,000 900,000 Accumulated Depreciation (450,000) 3,450,000 (300,000) Total Assets P 2,100,000 Liabilities 900,000 600,000 Ordinary share 450,000 150,000 Accumulated profits Total Liabilities and Equity 2,100 000 1,350,000 3,450,000 P 2,100,000 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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