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

ABC Company has the following financial data: Cash: $30,000Accounts Receivable: $50,000Inventory: $40,000Accounts Payable: $25,000Short-term Debt: $15,000Other Current Liabilities: $20,000Calculate the following: Current AssetsCurrent LiabilitiesCurrent Ratio

Accurate Answer

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 - Prob. 5Q 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