Explain why intra-entity transactions occur so frequently.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 5, Problem 1Q

To determine

Explain why intra-entity transactions occur so frequently.

Expert Solution & Answer

Answer to Problem 1Q

The intra-entity transactions are less costly in nature when compared to transaction made with other entities.

Explanation of Solution

Occurrence of intra-entity transactions:

Intra-entity transactions occur so frequently between parent and subsidiary because of the reason of generating more profits in consolidated financial statements. The intra-entity transactions are less costly in nature when compared to transaction made with other entities.

The intra-entity transactions are the transactions about sale and purchase of assets between parent and subsidiary where the transaction is recorded as normal sale and the profit is recorded.

However, the intra-entity transactions are removed while preparing the consolidated financial statements.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Please discuss and add additional info to what the person has mentioned in the paragraphs

As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 20Y9, the following tentative trial balance as of December 31, 20Y8, is prepared by the Accounting Department of Regina Soap Co.: Account Title Debit Balance Credit Balance Cash $103,500 Accounts Receivable 193,500 Finished Goods 40,600 Work in Process 27,100 Materials 44,500 Prepaid Expenses 3,300 Plant and Equipment 458,500 Accumulated Depreciation—Plant and Equipment $197,200 Accounts Payable 165,300 Common Stock, $10 par 250,000 Retained Earnings 258,500 Total $871,000 $871,000 Factory output and sales for 20Y9 are expected to total 24,000 units of product, which are to be sold at $120 per unit. The quantities and costs of the inventories at December 31, 20Y9, are expected to remain unchanged from the balances at the beginning of the year. Budget estimates of manufacturing costs and operating expenses for the…

Can you explain the correct methodology to solve this general accounting problem?

Answer 2

Question

Chapter 5, Problem 1Q

To determine

Explain why intra-entity transactions occur so frequently.

Expert Solution & Answer

Answer to Problem 1Q

The intra-entity transactions are less costly in nature when compared to transaction made with other entities.

Explanation of Solution

Occurrence of intra-entity transactions:

Intra-entity transactions occur so frequently between parent and subsidiary because of the reason of generating more profits in consolidated financial statements. The intra-entity transactions are less costly in nature when compared to transaction made with other entities.

The intra-entity transactions are the transactions about sale and purchase of assets between parent and subsidiary where the transaction is recorded as normal sale and the profit is recorded.

However, the intra-entity transactions are removed while preparing the consolidated financial statements.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 5, Problem 1Q

To determine

Explain why intra-entity transactions occur so frequently.

Expert Solution & Answer

Answer to Problem 1Q

The intra-entity transactions are less costly in nature when compared to transaction made with other entities.

Explanation of Solution

Occurrence of intra-entity transactions:

Intra-entity transactions occur so frequently between parent and subsidiary because of the reason of generating more profits in consolidated financial statements. The intra-entity transactions are less costly in nature when compared to transaction made with other entities.

The intra-entity transactions are the transactions about sale and purchase of assets between parent and subsidiary where the transaction is recorded as normal sale and the profit is recorded.

However, the intra-entity transactions are removed while preparing the consolidated financial statements.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 5, Problem 1Q

To determine

Explain why intra-entity transactions occur so frequently.

Expert Solution & Answer

Answer to Problem 1Q

The intra-entity transactions are less costly in nature when compared to transaction made with other entities.

Explanation of Solution

Occurrence of intra-entity transactions:

Intra-entity transactions occur so frequently between parent and subsidiary because of the reason of generating more profits in consolidated financial statements. The intra-entity transactions are less costly in nature when compared to transaction made with other entities.

The intra-entity transactions are the transactions about sale and purchase of assets between parent and subsidiary where the transaction is recorded as normal sale and the profit is recorded.

However, the intra-entity transactions are removed while preparing the consolidated financial statements.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 5, Problem 1Q

To determine

Explain why intra-entity transactions occur so frequently.

Expert Solution & Answer

Answer to Problem 1Q

The intra-entity transactions are less costly in nature when compared to transaction made with other entities.

Explanation of Solution

Occurrence of intra-entity transactions:

Intra-entity transactions occur so frequently between parent and subsidiary because of the reason of generating more profits in consolidated financial statements. The intra-entity transactions are less costly in nature when compared to transaction made with other entities.

The intra-entity transactions are the transactions about sale and purchase of assets between parent and subsidiary where the transaction is recorded as normal sale and the profit is recorded.

However, the intra-entity transactions are removed while preparing the consolidated financial statements.

Answer 6

Chapter 5, Problem 1Q

To determine

Explain why intra-entity transactions occur so frequently.

Expert Solution & Answer

Answer to Problem 1Q

The intra-entity transactions are less costly in nature when compared to transaction made with other entities.

Explanation of Solution

Occurrence of intra-entity transactions:

Intra-entity transactions occur so frequently between parent and subsidiary because of the reason of generating more profits in consolidated financial statements. The intra-entity transactions are less costly in nature when compared to transaction made with other entities.

The intra-entity transactions are the transactions about sale and purchase of assets between parent and subsidiary where the transaction is recorded as normal sale and the profit is recorded.

However, the intra-entity transactions are removed while preparing the consolidated financial statements.

Answer 7

Chapter 5, Problem 1Q

To determine

Explain why intra-entity transactions occur so frequently.

Answer 8

Expert Solution & Answer

Answer to Problem 1Q

The intra-entity transactions are less costly in nature when compared to transaction made with other entities.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Occurrence of intra-entity transactions:

Intra-entity transactions occur so frequently between parent and subsidiary because of the reason of generating more profits in consolidated financial statements. The intra-entity transactions are less costly in nature when compared to transaction made with other entities.

The intra-entity transactions are the transactions about sale and purchase of assets between parent and subsidiary where the transaction is recorded as normal sale and the profit is recorded.

However, the intra-entity transactions are removed while preparing the consolidated financial statements.

Answer 12

Ch. 5 - Prob. 1Q Ch. 5 - Prob. 2Q Ch. 5 - Prob. 3Q Ch. 5 - Prob. 4Q Ch. 5 - James, Inc., sells inventory to Matthews Company,...Ch. 5 - Prob. 6Q Ch. 5 - Prob. 7Q Ch. 5 - Prob. 8Q Ch. 5 - Prob. 9Q Ch. 5 - Prob. 10Q

Explain why intra-entity transactions occur so frequently.

Explain why intra-entity transactions occur so frequently.

Answer to Problem 1Q

Explanation of Solution

Want to see more full solutions like this?

Chapter 5 Solutions