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 ofP450,000 was recognized. The 20x6 financial statements are as follows:PhlaireSyanneIncome Statement900,000(600,000)(150,000)SalesP 1,200,000(802,500)(150,000)PCost of Goods SoldOperating ExpensesDividend Income52,500-0-Net Income300.000P.150.000Statement of Accumulated ProfitsAccumulated Profits, January 1, 2016P 1,275,000P1,950,000300,000Net Income150,000Dividends Paid(150,000)( 75,000)Accumulated Profits, December 31, 2016P2,100,000 P 1,350,000Statement of Financial PositionCash and Receivables600,000447,000P450,0001,050,000InventoryInvestment in SyanneFixed Assets1,353,0001,500,000-0-900,000Accumulated DepreciationTotal Assets(450,000)P 3,450,000 P 2,100,000(300,000)Liabilities600,000150,000P900,000POrdinary shareAccumulated profitsTotal Liabilities and Equity450,0002,100 000(Ctrl)P 3,450,000 P 2,100,000Phlaire sells inventory costing P108,000 to Syanne during 20x5 for P180,000. At year's end, 30 percent isleft. Syanne sellsinventory costing P300,000 to Phlaire during 201x for P375,000. At year's end, 20 percent isleft.

The question is related Consolidated Financial Statements. Required Prepare all necessary 20x6…

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Business

Accounting

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

Section: Chapter Questions

Problem 1Q

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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

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
900,000
(600,000)
(150,000)
Sales
P 1,200,000
(802,500)
(150,000)
P
Cost of Goods Sold
Operating Expenses
Dividend Income
52,500
-0-
Net Income
300.000
P.
150.000
Statement of Accumulated Profits
Accumulated Profits, January 1, 2016
P 1,275,000
P1,950,000
300,000
Net Income
150,000
Dividends Paid
(150,000)
( 75,000)
Accumulated Profits, December 31, 2016
P2,100,000 P 1,350,000
Statement of Financial Position
Cash and Receivables
600,000
447,000
P
450,000
1,050,000
Inventory
Investment in Syanne
Fixed Assets
1,353,000
1,500,000
-0-
900,000
Accumulated Depreciation
Total Assets
(450,000)
P 3,450,000 P 2,100,000
(300,000)
Liabilities
600,000
150,000
P
900,000
P
Ordinary share
Accumulated profits
Total Liabilities and Equity
450,000
2,100 000
(Ctrl)
P 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 sellsinventory costing P300,000 to Phlaire during 201x for P375,000. At year's end, 20 percent is
left.

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