When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation. The net income reported by A for 20X3 assuming A and B used the equity method of accounting for intercompany transactions.

Question

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Answer 1

Question

Chapter 5, Problem 5.27P

a

To determine

Introduction: When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation.

The net income reported by A for 20X3 assuming A and B used the equity method of accounting for intercompany transactions.

b

To determine

Introduction: When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation.

The entries recorded by A in relation to investment in B during 20X3.

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Answer 2

Question

Chapter 5, Problem 5.27P

a

To determine

Introduction: When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation.

The net income reported by A for 20X3 assuming A and B used the equity method of accounting for intercompany transactions.

b

To determine

Introduction: When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation.

The entries recorded by A in relation to investment in B during 20X3.

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Answer 3

Question

Chapter 5, Problem 5.27P

a

To determine

Introduction: When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation.

The net income reported by A for 20X3 assuming A and B used the equity method of accounting for intercompany transactions.

b

To determine

Introduction: When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation.

The entries recorded by A in relation to investment in B during 20X3.

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Answer 4

Question

Chapter 5, Problem 5.27P

a

To determine

Introduction: When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation.

The net income reported by A for 20X3 assuming A and B used the equity method of accounting for intercompany transactions.

b

To determine

Introduction: When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation.

The entries recorded by A in relation to investment in B during 20X3.

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Answer 5

Chapter 5, Problem 5.27P

a

To determine

Introduction: When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation.

The net income reported by A for 20X3 assuming A and B used the equity method of accounting for intercompany transactions.

b

To determine

Introduction: When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation.

The entries recorded by A in relation to investment in B during 20X3.

Answer 6

Chapter 5, Problem 5.27P

a

To determine

Introduction: When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation.

The net income reported by A for 20X3 assuming A and B used the equity method of accounting for intercompany transactions.

Answer 7

Chapter 5, Problem 5.27P

a

To determine

Introduction: When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation.

The net income reported by A for 20X3 assuming A and B used the equity method of accounting for intercompany transactions.

Answer 8

b

To determine

Introduction: When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation.

The entries recorded by A in relation to investment in B during 20X3.

Answer 9

b

To determine

Introduction: When asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected as the proportion of differential is included in parents books as part of the investment in the subsidiary. When the asset is sold it must be written off by the parent in consolidation.

The entries recorded by A in relation to investment in B during 20X3.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 5 - Where is the balance assigned to the...Ch. 5 - Why must a noncontrolling interest be reported in...Ch. 5 - Prob. 5.3Q Ch. 5 - Prob. 5.4Q Ch. 5 - Prob. 5.5Q Ch. 5 - Prob. 5.6Q Ch. 5 - Prob. 5.7Q Ch. 5 - Prob. 5.8Q Ch. 5 - Prob. 5.9Q Ch. 5 - Prob. 5.10Q

Solution Summary: The author explains that when asset held by the subsidiary are with differential, both the equity method income and consolidated net income is affected.

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Chapter 5 Solutions