Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Question
Chapter 6, Problem 6.1.1E
To determine
Intercompany transactions:
Consolidated financial statements are prepared by a parent company to consolidate the assets and liabilities of the parent and its subsidiaries. There may be some transactions between these companies which are called intercompany transactions.
To choose: The correct option.
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Students have asked these similar questions
On January 1, 2012, Aspen Company acquired 80 percent of Birch Company's outstanding voting stock
for $438,000. Birch reported a $457,500 book value and the fair value of the noncontrolling interest was
$109,500 on that date. Also, on January 1, 2013, Birch acquired 80 percent of Cedar Company for
$200,000 when Cedar had a $205,000 book value and the 20 percent noncontrolling interest was
valued at $50,000. In each acquisition, the subsidiary's excess acquisition-date fair over book value
was assigned to a trade name with a 30-year life.
These companies report the following financial information. Investment income figures are not
included.
Sales:
Aspen Company
Birch Company
Cedar Company
Expenses:
Aspen Company
Birch Company
Cedar Company
Dividends declared:
Aspen Company
Birch Company
Cedar Company
2012
$ 632,500
261,250
Not available
$ 542,500
200,000
Not available
$15,000
8,000
Not available
2013
2014
$747,500
327,250
$822,500
416,900
185,900 292,600
$522,500 $750,000
261,000…
a. What is the consolidated inventory for 20x6?
b. What is the consolidated cost of goods sold for 20x6?
What should the adjustment for consolidated entry be when a Subsidiary sold inventory to Parent at a lower cost. Example: S bought inventory at a cost of 300. S sold to P at 200.
Chapter 6 Solutions
Advanced Financial Accounting
Ch. 6 - Why must inventory transfers to related companies...Ch. 6 - Why is there a need for a consolidation entry when...Ch. 6 - Prob. 6.3QCh. 6 - How do unrealized intercompany profits on a...Ch. 6 - How do unrealized intercompany profits on an...Ch. 6 - Prob. 6.6QCh. 6 - Prob. 6.9QCh. 6 - Prob. 6.10QCh. 6 - How is the amount of consolidated retained...Ch. 6 - How will the elimination of unrealized...
Ch. 6 - Prob. 6.14QCh. 6 - Is an inventory sale from one subsidiary to...Ch. 6 - Prob. 6.16QCh. 6 - Prob. 6.1.1ECh. 6 - Prob. 6.1.2ECh. 6 - MultipleChoice Questions on Intercompany Inventory...Ch. 6 - MultipleChoice Questions on Intercompany Inventory...Ch. 6 - Prob. 6.1.5ECh. 6 - Prob. 6.1.6ECh. 6 - Prob. 6.3.1ECh. 6 - Prob. 6.3.2ECh. 6 - Prob. 6.3.3ECh. 6 - Prob. 6.4.1ECh. 6 - Prob. 6.4.2ECh. 6 - Prob. 6.4.3ECh. 6 - Prob. 6.4.4ECh. 6 - Prob. 6.5.1ECh. 6 - Prob. 6.5.2ECh. 6 - Prob. 6.5.3E
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