Intercompany transfers:When intercompany transfer of asset occur, the parent company must make adjustments in preparing consolidated financial statements as long as the asset is held by acquiring company, when the asset is transferred at book value no special adjustments are needed. But when the asset is transferred at more or less than the book value, the unrealized gain or loss is deferred until the asset is sold to unrelated party. Moreover in the consolidation the gain or loss will be eliminated.
At what amount should the land be reported in consolidated
Intercompany transfers:When intercompany transfer of asset occur, the parent company must make adjustments in preparing consolidated financial statements as long as the asset is held by acquiring company, when the asset is transferred at book value no special adjustments are needed. But when the asset is transferred at more or less than the book value, the unrealized gain or loss is deferred until the asset is sold to unrelated party. Moreover in the consolidation the gain or loss will be eliminated.
The amount of gain or loss on sale of land reported in consolidated income statement for 20X3.
Intercompany transfers:When intercompany transfer of asset occur, the parent company must make adjustments in preparing consolidated financial statements as long as the asset is held by acquiring company, when the asset is transferred at book value no special adjustments are needed. But when the asset is transferred at more or less than the book value, the unrealized gain or loss is deferred until the asset is sold to unrelated party. Moreover in the consolidation, the gain or loss will be eliminated.
The amount of income should be assigned to the controlling shareholders in consolidated income statement for 20X3.
Intercompany transfers:When intercompany transfer of asset occur, the parent company must make adjustments in preparing consolidated financial statements as long as the asset is held by acquiring company, when the asset is transferred at book value no special adjustments are needed. But when the asset is transferred at more or less than the book value, the unrealized gain or loss is deferred until the asset is sold to unrelated party. Moreover in the consolidation the gain or loss will be eliminated.
Requirement 4
The consolidation entry related to land that appear in consolidation worksheet for 20X3.
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Chapter 7 Solutions
EBK ADVANCED FINANCIAL ACCOUNTING
- Vd Subject: accountingarrow_forwardIdentifiable Intangibles and Goodwill Prince Corporation acquires Squire Service Corporation for one million shares of Prince stock, valued at $35 per share. Squire is merged into Prince, although it continues to do business under the Squire Service name. Professional fees connected with the acquisition are $1,200,000 and costs of registering and issuing the new shares are $600,000, both paid in cash. Squire performs vehicle maintenance services for owners of auto, truck and bus fleets. Squire's balance sheet at acquisition is as follows: Cash Accounts receivable Parts inventory Equipment Total assets $300,000 Current liabilities 2,700,000 Long-term liabilities 5,200,000 Shareholders' equity 17,600,000 $25,800,000 Total liabilities and equity $25,800,000 In reviewing Squire's assets and liabilities, you determine the following. 1. On a discounted present value basis, the accounts receivable have a fair value of $2,600,000, and the long-term liabilities have a fair value of $8,000,000.…arrow_forwardNagy Company makes a lump-sum purchase of several assets on January 1 at a total cash price of $1,800,000. The estimated market values of the purchased assets are building, $890,000; land, $427,200; land improvements, $249,200; and five trucks, $213,600. Required 1. Allocate the lump-sum purchase price to the separate assets purchased. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 12-year life and a $120,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a 10-year life and double-declining-balance depreciation. Analysis Component 4. Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the asset’s life?arrow_forward
- Dengerarrow_forwardColumbia recently acquired all of Mercury's net assets in a business acquisition. The cash purchase price was $22,000,000. Mercury's assests and liabilites had the following costs and appraised values: Current assets Land, building and equipment Current liabilites Mortgage payable How much goodwill will rewult from this transaction? Cost Basis $ 6,000,000 $ 14,000,000 Appraised Value $ 6,000,000 $23,000,000 $4,000,000 $4,000,000 $ 10,000,000 $10,000,000arrow_forwardFoley Distribution Service pays $330,000 for a group purchase of land, bulding, and equipment At the time of acquisition, the land has a current market value of $36,000, the building's current market valu $36, 000, and the equipment's current market value is $ 283,000. Prepare a schedule allocating the purchase price of 5330.000 to each of the individual assets purchased based on their relative market val journalize the lump - sum purchase of the three assets. The business signs a note payable for the purchase pricearrow_forward
- answer step by steparrow_forward3arrow_forwardOn January 1, 20X1, Amber Products Corporation sold land costing $200,000 to its subsidiary, Jerry Interiors Corporation, for $240,000. Jerry still held the land at the end of 20X2. Jerry sold the land to a nonaffiliate on March 31, 20X3, for $255,000. Prepare the consolidation entry related to the land at the end of 20X2. Debit Land for $40,000; Credit Gain on Sale of Land for $40,000 Debit Investment in Jerry for $40,000; Credit Land for $40,000 Debit Gain on Sale of Land for $40,000; Credit Land for $40,000 bit Land for $40,000; Credit Investment in Jerry for $40,000.arrow_forward
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning