What is the consolidation worksheet entry required to be made at the end of 2020 for the unrealized gain ?
Q: On January 1, 2018, Dermot Company purchased 12% of the voting common stock of Horne Corp. On…
A: Accounting for investments involves recording and reporting the value and income of an entity's…
Q: On January 1, 2020, Choco Co. pays $96,000 to acquire 30% of the voting common stock of Cake Inc.…
A: Under equity method, the debit balance of investment account will be affected b positively by income…
Q: The Individual financial statements for Gibson Company and Keller Company for the year ending…
A: Consolidation is an activity in which financial statements of a parent and its subsidiary should be…
Q: At the beginning of 2020, Silver Corporation has a $95,000 capital loss carryforward from 2019.…
A: Section 1231 propertyExamples of section 1231 property that are depreciable business assets include…
Q: In January 2020, Foster, Inc. acquired a 40% interest in Brady, Inc. for $250,000, giving Foster…
A: A journal entry is a type of accounting entry that is used to record a business transaction in a…
Q: Equity method balance in Phillips's Investment in Bearden, Inc., account as of December 31, 2022.…
A: Consolidation: A process in which many smaller companies get amalgamated through merger and…
Q: Pint Co. owns 90% of the outstanding shares of Glass Inc. During 2022, Pint sold merchandise costing…
A: In financial accounting, Consolidation refers to the financial statement consolidation process in…
Q: Thomas Ltd owns 100% of the shares of Uncle Ltd with acquisition date being 1 July 2019. During the…
A: Given that, On 1.7.2019, Thomas Ltd. acquired 100% share of Uncle Ltd. Therefore, Thomas Ltd =…
Q: High owns 60% of Low. In 2019, Low sold inventory (cost $70,000) to High for $100,000. 40% of this…
A: given that, low sold inventory to High for $100000 cost of inventory sold = $70000 profit included…
Q: Acker Inc. bought 40% of Howell Co. on January 1, 2020 for $576,000. The equity method of accounting…
A: Unrealized profit, December 31, 2020 = [($20,000 / $75,000) x $15,000] x 40% = $1,600
Q: On January 1, 2021, Grouper purchased additional stock of Jennifer Company for $489,000 and now has…
A: The the books of grouper's journal entries are as follows
Q: a. Compute the amount of Aqua's recognized gain on the sale of the realty.
A: Capital gain refers to the profit that is earned when an asset, such as a stock, bond, real estate,…
Q: During 2019, Brooke sold to its subsidiary, Cabana, land with a book value of $507,000. The selling…
A: In the pre-consolidation accounting records, the parent entity should recognize the profit on every…
Q: On July 1, 2019, Killearn Company acquired 124,000 of the outstanding shares of Shaun Company for…
A:
Q: On January 1, 2020, Adamson, Inc. acquired the outstanding voting common stock of Skyview Corp. for…
A: Consolidated financial statements can be defined as the combined financial statements of the parent…
Q: On January 1, 2020, Alison, Inc., paid $77,000 for a 40 percent interest in Holister Corporation’s…
A: Investment is the process of generating income in the near future by investing in an asset which is…
Q: Alex, Inc., buys 30 percent of Steinbart Company on January 1, 2020, for $762,000. The equity method…
A: Introduction: Money earned from stock dividends is referred to as equity income. A dividend is…
Q: Par Inc. owns 70% of Sent Inc's voting shares Sent purchased land for 560.000 and then sold it to…
A: Subsidiary sell the land to parent company on profit, we should eliminate the impact of profit by…
Q: Fredo, Incorporated, purchased 10% of Sonny Enterprises for $1,000,000 on January 1, 2024. Sonny…
A: An investor should generally apply the equity method of accounting for investments in common stock…
Q: Steinbart reports net income of $104,500 in 2023 and $139,300 in 2024 and declares $20,000 in…
A: An equity investment defined :- It is invested in a company by procurement of stocks of that company…
Q: Aqua Corporation purchases nonresidential real property on May 8, 2017, for $1,000,000.…
A: The companies recognize the ordinary income on the sale of the property as 20% of the excess of…
Q: On January 1, 2020, Alison, Inc., paid $83,800 for a 40 percent interest in Holister Corporation’s…
A: Solution Common stock can be defined as securities that represent individuals ownership in a said…
Q: purchased 2,000 shares of Potter Wholesale for $35 per share. Based on the percentage of outstanding…
A: The realised gain or loss is the difference between the Fair Value of Stock and Sale Value of Stock…
Q: On March 25, 2021, Phillips Corporation purchased bonds of Atlas Corporation for $132 million and…
A: The company can make investments in bonds. The investment in bonds can be classified as trading…
Q: Acker Inc. bought 40% of Howell Co. on January 1, 2020 for $576,000. The equity method of accounting…
A: Equity Method:-It is a method of accounting, the investor company shows the revenue earned from…
Q: uisition-date fair value of $350,000. This intangible asset is being amortized over 20 years. Gibson…
A: The process of integrating the financial results of numerous subsidiary firms into the parent…
Q: Phast Corporation owns a 80% interest in Stechno Company, acquired several years ago at a cost equal…
A: THE PARENT COMPANY BALANCE IS ADDED TO THE SUBSIDIARY'S BALANCE BUT ANY UNREALIZED PROFIT REMAINING…
Q: The individual financial statements for Gibson Company and Keller Company for the year ending…
A: Consolidated Financial Statement - In these type of financial statements includes assets,…
Q: as the parent company sold to the subsidiary in the year ending 30 June 2018 and a consolidation…
A: The calculation of Net identifiable assets and bargain purchase is as follows: Resultant table:
Q: Dunn Corporation owns 100 percent of Grey Corporation’s common stock. On January 2, 2020, Dunn sold…
A: Asset sold for $53450 Cost =$40500 Depreciation = 53450/5 =$10690 Depreciation expense will…
Q: Brooks owns 20% of Ghost Inc. The following information pertains to an intra entity transfer. What…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: Company P purchases an 80% interest in Company S on January 1, 2015, for $480,000. Company S had…
A:
Q: Ramirez Company has a held-for-collection investment in the 6%, 20-year bonds of Soto Company. The…
A: GAAP - Generally Accepted Accounting Principles refer to a common set of accounting principles,…
Q: On January 1, 2017, Lund Corporation purchases a 30% interest in Aluma-Boat Company for $200,000. At…
A: Investment is the action of the personnel or the group of people investing the money in such an…
Q: On July 1, 2019, Killearn Company acquired 105,000 of the outstanding shares of Shaun Company for…
A: When a corporation acquires another corporation, the accounting treatment of the invested capital or…
Q: On January 1, 2020, Hand acquires 40% ownership of Foot. At the acquisition date, Foot had…
A: Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life…
Q: On January 1, 2020, Pharoah Corporation purchased 40% of the common shares of Novak Company for…
A: Given that, Pharoah Corporation purchased 40% of the common shares of Novak Company for $201,000…
Q: Renfroe, Inc. acquired 10% of Stanley Corporation on January 4, 2020, for $90,000 when the book…
A: Investment is a chase with objective of purchase achieving funds in significant value when an acid…
Q: Griggs Company bought 30% of Jackson Corporation in 2020. During 2020, Jackson reported net income…
A: Cost method = Under the cost method, shares purchased are recorded at the historical purchase price…
Q: On July 1, 2019, Killearn Company acquired 110,000 of the outstanding shares of Shaun Company for…
A: Calculation of the equity income to be recognized by Killearn during each of these years:-…
Q: What would be the consolidation worksheet entries in relation to this asset when preparing the…
A: Depreciation refers to the apportionment of the cost of an asset over its useful life. Moreover,…
Q: Camille, Inc., sold $130,000 in inventory to Eckerle Company during 2020 for $250,000. Eckerle…
A: The equity method is used to record the profit earned through its investment in another business.…
Q: Skywalker Limited purchased shares of Jedi Jewelers during 2022 for $124,000. Skywalker elected the…
A: InvestmentsThe amount of money put into something that gives profits and benefits to the company is…
Hand owns 90% of Finger and uses the equity method to account for its investment in Finger. In 2020, Finger sells inventory (cost of $60,000) to Hand for $80,000. Hand remains with 30% of this inventory at the end of 2020.
What is the consolidation worksheet entry required to be made at the end of 2020 for the unrealized gain ?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- On January 1, 2020, Gardner bought 85% of Isbell. Gardner saw that there was an unrecorded asset on its accounting records that is valued at $71,000 and has 5 years remaining life. All excess fair value over book value was denoted as goodwill. During 2021, Isbell sold inventory to Gardner for $227,000 that cost $188,000, and of this amount, 30% remained unsold in Gardner’s ending inventory on December 31, 2021. Selected financial information for Gardner and Isbell on December 31, 2021: Gardner Isbell Inventory 685,000 475,000 Sales 1,275,000 983,000 COGS 705,000 545,000 Operating expenses 338,000 395,000 What is the value of the consolidated COGS?Adams owns 80% of Williams and has a carrying value of the investment at January 1, 2020, of $600,000. On that date, Adams sells 20% of its investment for $150,000 reducing its ownership to 60%. What journal entry is recorded by Williams at that dateCamille, Incorporated, sold $147,000 in inventory to Eckerle Company during 2023 for $245,000. Eckerle resold $109,000 of this merchandise in 2023 with the remainder to be disposed of during 2024. Required: Assuming that Camille owns 34 percent of Eckerle and applies the equity method, what journal entry is recorded at the end of 2023 to defer the intra-entity gross profit? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. 1.Record the entry at the end of 2023 to defer unrealized gross profit.
- On January 1, 2020, Waterway Corporation purchased 40% of the common shares of Wildhorse Company for $192,000. During the year, Wildhorse earned net income of $81,000 and paid dividends of $20,250.Prepare the entries for Waterway to record the purchase and any additional entries related to this investment in Wildhorse Company in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit (To record purchase of stock.) (To record receipt of dividends.) (To record revenue.)Fullerton Corporation owns 100% of Irvine Corporation's common stock. On January 2, 2020, Fullerton sold machinery with a carrying amount of $30,000 to Irvine Corp for $50,000. Irvine Corp is depreciating the acquired machinery over a 10-year life using the straight-line method. The related net adjustments to compute the 2020 and 2021 consolidated income (gain, loss, depreciation expense, etc.) before income tax would be an increase (decrease) of: Select one: a. $(16,000) for 2020 and $4,000 for 2021 b. $(18,000) for 2020 and $2,000 for 2021 c. $(20,000) for 2020 and $2,000 for 2021 d. $(20,000) for 2020 and $0 for 2021Aqua Corporation purchases nonresidential real property on May 8, 2020, for S1, 630, 000. Straight - line cost recovery is taken in the amount of $163, 000 before the property is sold on November 27, 2023, for S2, 445,000.a. Compute the amount of Aqua's recognized gain on the sale of the realty.b. Determine the amount of the recognized gain that is treated as § 1231 gain and the amount that is treated as § 1250 recapture (ordinary income due to § 291). § 1231 gain:§ 1250 recapture (ordinary income due to §
- Company R owns a 30% interest in Company E, which it acquires at book value. Company E reports net income of $50,000 for 2015 (ignore taxes). There is an intercompany sale of equipment at a gain of $20,000 on January 1, 2015. The equipment has a 5-year life. What is Company R’s investment income for 2015, and what adjusting entry (if any) does Company R need to make as a result of the equipment sale, if: a. Company E made the sale? b. Company R made the sale?L Company owns 30% of S Company’s common stock which gives it the ability to apply significant influence and thus uses the equity method of accounting for its investment. During 2020 L Company sold inventory costing $120,000 to S company for $200,000. Also during 2020 S company resold $85,000 of this inventory to third parties. What journal entry would L Company make at the end of 2020 to defer the intra-entity gross profit?On January 1, 2020. Alison, Inc., paid $69,500 for a 40 percent interest in Holister Corporation's common stock. This investee had assets with a book value of $219,500 and liabilities of $95,500. A patent held by Holister having a $12,000 book value was actually worth $31,500. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2020, Holister earned income of $32,500 and declared and paid dividends of $11,000. In 2021, it had income of $71,500 and dividends of $16,000. During 2021, the fair value of Allison's investment in Holister had risen from $79,200 to $89,900. a. Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31, 2021? b. Assuming Alison uses fair-value accounting, what income from the investment in Holister should be reported for 2021? a. Investment in Holister b. Investment income
- Choco, Inc. acquires 15% of Cake Corporation on January 1, 2020, for $130,000 when the book value of Cake’s net assets was $760,000. During 2020 Cake reported net income of $150,000 and paid dividends of $32,000. Cake has a land that are undervalued by $30,000 in January 1, 2020. On January 1, 2021, Choco purchased an additional 30% of Cake for $280,000, giving Choco the ability to significantly influence the operating policies of Cake. During 2021, Cake reported net income of $180,000 and paid dividends of $32,000. Cake’s land was undervalued by $32,000 in January 1, 2021. Any excess of cost over book value is attributable to Trademark which has a useful life of 8 years in January 1, 2020. During 2020 and 2021, there was no fair value adjustment for Cake (there was no changes in fair value). And during 2020 and 2021, there was no changes in net assets. 5) In 2021, using the equity method, what is the balance of the investment account in Cake at December 31, 2020? Show your…Jane Company purchased 80% of the outstanding voting shares of Snow Company at the beginning of 2019 for OMR 850,000. At the time of purchase, Snow company total stockholder’s equity amounted to OMR 875,000. What is the entry of the cost method to record its investment.Select one:a.Investment in Snow Company Dr320,000Cash Cr320,000b.Investment in Snow Company Dr875,000Cash Cr875,000c.Investment in Snow Company Dr850,000Cash Cr850,000d. None of the other pointsOn July 1, 2019, Killearn Company acquired 105,000 of the outstanding shares of Shaun Company for $19 per share. This acquisition gave Killearn a 40 percent ownership of Shaun and allowed Killearn to significantly influence the investee's decisions. As of July 1, 2019, the investee had assets with a book value of $5 million and liabilities of $1,101,500. At the time, Shaun held equipment appraised at $280,000 more than book value; it was considered to have a seven-year remaining life with no salvage value. Shaun also held a copyright with a five-year remaining life on its books that was undervalued by $650,000. Any remaining excess cost was attributable to goodwill. Depreciation and amortization are computed using the straight-line method. Killearn applies the equity method for its investment in Shaun. Shaun's policy is to declare and pay a $1 per share cash dividend every April 1 and October 1. Shaun's income, earned evenly throughout each year, was $640,000 in 2019, $670,600 in 2020,…