Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser recordas an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income. Computation of consolidated net income for GD services for 20X3.

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Answer 1

Question

Chapter 7, Problem 7.14E

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser recordas an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Computation of consolidated net income for GD services for 20X3.

b

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser record as an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Journal entries in books of GD service related to its investment in AR, using adjusted equity method of accounting for investments.

c

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser record as an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Consolidation entries for preparing consolidated work sheet for the year ended 31 December 20X3.

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Bobby Corp. had the following transactions during 2019: -Sales of $8820 on account. -Collected $3920 for services to be performed in 2020. -Paid $3680 cash in salaries for 2019. -Purchased airline tickets for $490 in December for a trip to take place in 2020. What is Bobby's 2019 net income using accrual accounting? Help

Answer 2

Question

Chapter 7, Problem 7.14E

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser recordas an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Computation of consolidated net income for GD services for 20X3.

b

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser record as an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Journal entries in books of GD service related to its investment in AR, using adjusted equity method of accounting for investments.

c

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser record as an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Consolidation entries for preparing consolidated work sheet for the year ended 31 December 20X3.

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Answer 3

Question

Chapter 7, Problem 7.14E

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser recordas an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Computation of consolidated net income for GD services for 20X3.

b

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser record as an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Journal entries in books of GD service related to its investment in AR, using adjusted equity method of accounting for investments.

c

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser record as an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Consolidation entries for preparing consolidated work sheet for the year ended 31 December 20X3.

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Answer 4

Question

Chapter 7, Problem 7.14E

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser recordas an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Computation of consolidated net income for GD services for 20X3.

b

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser record as an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Journal entries in books of GD service related to its investment in AR, using adjusted equity method of accounting for investments.

c

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser record as an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Consolidation entries for preparing consolidated work sheet for the year ended 31 December 20X3.

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Answer 5

Chapter 7, Problem 7.14E

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser recordas an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Computation of consolidated net income for GD services for 20X3.

b

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser record as an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Journal entries in books of GD service related to its investment in AR, using adjusted equity method of accounting for investments.

c

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser record as an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Consolidation entries for preparing consolidated work sheet for the year ended 31 December 20X3.

Answer 6

Chapter 7, Problem 7.14E

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser recordas an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Computation of consolidated net income for GD services for 20X3.

Answer 7

Chapter 7, Problem 7.14E

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser recordas an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Computation of consolidated net income for GD services for 20X3.

Answer 8

b

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser record as an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Journal entries in books of GD service related to its investment in AR, using adjusted equity method of accounting for investments.

Answer 9

b

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser record as an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Journal entries in books of GD service related to its investment in AR, using adjusted equity method of accounting for investments.

Answer 10

c

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser record as an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Consolidation entries for preparing consolidated work sheet for the year ended 31 December 20X3.

Answer 11

c

To determine

Introduction: Intercompany transfers occur when related companies purchases services from each other. When one company purchases services from an associated company both will record this transaction, the purchaser record as an expense and the seller records revenue. This revenue and expense must be eliminated for the purpose of consolidation. All revenue and expenses of both the companies are included in financial statements for the purpose of calculating net income.

Consolidation entries for preparing consolidated work sheet for the year ended 31 December 20X3.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 7 - Prob. 7.1Q Ch. 7 - Prob. 7.2Q Ch. 7 - Prob. 7.3Q Ch. 7 - Prob. 7.4Q Ch. 7 - Prob. 7.5Q Ch. 7 - Prob. 7.6Q Ch. 7 - Prob. 7.7Q Ch. 7 - Prob. 7.8Q Ch. 7 - Prob. 7.9Q Ch. 7 - Prob. 7.10Q

Solution Summary: The author explains that intercompany transfers occur when related companies purchase services from each other. The purchaser records as an expense and the seller records revenue.

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Chapter 7 Solutions