Explain why intra-entity transactions occur so frequently.

Question

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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.

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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.

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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.

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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.

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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

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Chapter 5 Solutions