EBK ADVANCED FINANCIAL ACCOUNTING
11th Edition
ISBN: 8220102796096
Author: Christensen
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 7, Problem 7.2.1E
To determine
Concept Introduction:
The intercompany transactions occur when the unit of legal entity is having transactions with another unit of the similar entity. This transaction can be divided into two categories such as direct and indirect intercompany transfer. The direct transfer occurs when there is transfer between the different units of the same entity and indirect transfer occurs when the unit of entity acquires debt or assets issued to unrelated entity through another unit of the same entity. This type of transfer will help the entity in improving the flow of finance and asset in efficient manner.
:
The correct statement regarding the consolidation entry during the preparation of financial statement.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Phobos Company holds 80 percent of Simons Company's voting shares. During the preparation of consolidated financial statements for 20X9, the following consolidation entry was made:
Account
Investment in Simons
NCI in NA of Simons
Land
Which of the following statements is correct?
Debit
40,000
10,000
O Simons Company purchased land from Phobos Company during 20X9.
O Phobos Company purchased land from Simons Company during 20X9.
O Phobos Company purchased land from Simons Company before January 1, 20X9.
O Simons Company purchased land from Phobos Company before January 1, 20X9.
Credit
50,000
R E Q U I R E D:Determine the amounts that would appear in the consolidated financial statements of PamCorporation and Sam for each of the following:
4. Consolidated retained earnings at December 31, 2019 5. Consolidated net income for 2019 6. Non-controlling interest at December 31, 2018
R E Q U I R E D:Determine the amounts that would appear in the consolidated financial statements of PamCorporation and Sam for each of the following:1. Goodwill at December 31, 2019 2. Non-controlling interest share for 2019 3. Consolidated retained earnings at December 31, 2018
Chapter 7 Solutions
EBK ADVANCED FINANCIAL ACCOUNTING
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Prob. 7.7QCh. 7 - Prob. 7.8QCh. 7 - Prob. 7.9QCh. 7 - Prob. 7.10Q
Ch. 7 - Prob. 7.11QCh. 7 - Prob. 7.12QCh. 7 - Prob. 7.13QCh. 7 - Prob. 7.14QCh. 7 - Prob. 7.15QCh. 7 - Prob. 7.16QCh. 7 - Prob. 7.17QCh. 7 - Prob. 7.18AQCh. 7 - Prob. 7.1CCh. 7 - Prob. 7.2CCh. 7 - Prob. 7.3CCh. 7 - Prob. 7.4CCh. 7 - Prob. 7.5CCh. 7 - Prob. 7.1.1ECh. 7 - Prob. 7.1.2ECh. 7 - Prob. 7.1.3ECh. 7 - Prob. 7.1.4ECh. 7 - Prob. 7.1.5ECh. 7 - Prob. 7.2.1ECh. 7 - Prob. 7.2.2ECh. 7 - Prob. 7.2.3ECh. 7 - Prob. 7.2.4ECh. 7 - Prob. 7.2.5ECh. 7 - Prob. 7.2.6ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.5ECh. 7 - Prob. 7.6ECh. 7 - Prob. 7.7ECh. 7 - Prob. 7.8ECh. 7 - Prob. 7.9ECh. 7 - Prob. 7.10ECh. 7 - Prob. 7.11ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Prob. 7.15ECh. 7 - Prob. 7.16ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.20ECh. 7 - Prob. 7.21ECh. 7 - Prob. 7.22ECh. 7 - Prob. 7.23AECh. 7 - Computation of Consolidated Net Income Petime...Ch. 7 - Prob. 7.25PCh. 7 - Prob. 7.26PCh. 7 - Prob. 7.27PCh. 7 - Prob. 7.28.1PCh. 7 - Prob. 7.28.2PCh. 7 - Prob. 7.28.3PCh. 7 - Prob. 7.28.4PCh. 7 - Prob. 7.29PCh. 7 - Prob. 7.30PCh. 7 - Prob. 7.31PCh. 7 - Prob. 7.32PCh. 7 - Prob. 7.33PCh. 7 - Prob. 7.34PCh. 7 - Prob. 7.35PCh. 7 - Prob. 7.36PCh. 7 - Prob. 7.37PCh. 7 - Prob. 7.38PCh. 7 - Prob. 7.39APCh. 7 - Prob. 7.40APCh. 7 - Modified Equity Method Using the data in P7-33, on...Ch. 7 - Prob. 7.42AP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Assume that both the Parent and Subsidiary adopt 31 December as their financial year-end. Further assume that the transactions were conducted on cash basis. (i) Prepare all the relevant journal entries in the separate financial statements of the respective companies. (ii) Prepare all the relevant consolidation journal entries for the preparation of the consolidated financial statements of the Parent. (b) On 20 December 20x1, a 70%-owned Subsidiary sold a piece of inventory Y which it bought for $300,000 to its Parent for $200,000. As at 31 December 20x1, that piece of inventory was still with the Parent and the net realisable value of the inventory was $250,000 on this date.arrow_forwardConsolidation at the end of the first year subsequent to date of acquisition-Cost method (purchase price equals book value) Assume the parent company acquires its subsidiary on January 1, 2019, by exchanging 20,000 shares of its $1 par value Common Stock, with a market value on the acquisition date of $50 per share, for all of the outstanding voting shares of the acquiree. You have been charged with preparing the consolidation of these two companies at the end of the first year. On the acquisition date, all of the subsidiary's assets and liabilities had fair values equaling their book values. The parent uses the cost method of pre-consolidation Equity investment bookkeeping. Following are financial statements of the parent and its subsidiary for the year ended December 31, 2019. Parent Subsidiary Parent Subsidiary Income statement Sales Cost of goods sold Gross profit Investment income Operating expenses Net income Statement of retained earnings BOY retained earnings Net income…arrow_forwardI just need the consolidation entries and the consolidation spreadsheet parts D and Earrow_forward
- b. Prepare all consolidation entries needed to prepare consolidated statements for 20X5. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.a. Prepare all journal entries that Pizza recorded during 20×5 related to its investment in Slice. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction listPizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $151,000. On that date, the fair value of the noncontrolling interest was $37,750, and Slice reported retained earnings of $46,000 and had $95,000 of common stock outstanding Pizza has used the equity method in accounting for its investment in Slice. Trial balance data for the two companies on December 31, 20X5, are as follows: Item Pizza Corporation Slice Products Company Debit Credit Debit Credit Cash and Receivables $ 86,000 $ 67,000 Inventory 277,000…arrow_forwardIntra-group transaction Question (worksheet adjustment entries for the following independent transactions) Sydney Ltd owns all of the shares of Mel Ltd. In relation to the following intragroup transactions, all parts of which are independent unless specified, prepare the consolidation worksheet adjusting entries for preparation of the consolidated financial statements as at 30 June 2019. Assume an income tax rate of 30%. (e) SYD Ltd sold a warehouse to MEL Ltd for $150 000. This had originally cost SYD Ltd $123 000. The transaction took place on 1 January 2018. MEL Ltd charges depreciation at 5% p.a. on a straight-line basis.arrow_forwardAlmond acquires 80% of the share capital of Cashew on 1 August 20X6 and is preparing its group financial statements for the year ended 31 December 20X6. How will Cashew's results be included in the consolidated statement of financial position at 31 December 20X6? a. 80% of Cashew's assets and liabilities, time apportioned for the 4 months from 1 August 20X6 to 31 December 20X6 b. 80% of Cashew's assets and liabilities at 31 December 20X6 C. 100% of Cashew's assets and liabilities at 31 December 20X6 С. d. 100% of Cashew's assets and liabilities, time apportioned for the 4 months from 1 August 20X6 to 31 December 20X6arrow_forward
- If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: REQUIREMENTS: Consolidated Equity at the date of acquisitionarrow_forwardOutlook Inc. merges with Pinnacle Inc. Only Pinnacle remains. Refer to Fact Pattern 31-1. Outlook held rights in certain real property. With regard to these assets, in the merger Pinnacle assumes a. all of Outlook’s assets. b. an amount of assets equal to the ratio of the firms’ pre-merger market values. c. none of Outlook’s assets. d. only those assets acquired after the merger was proposed.arrow_forwardAfter the business combination on the basis of full-goodwill approach, what amount of total assets will be reported? (Use only the given information) a. P1,081,000 b. P1,121,000 c. P1,196,500 d. P1,231,500arrow_forward
- What is the amount of total assets of PNB on january 1, 2018 after the merger?arrow_forwardAfter the business combination on the basis of full-goodwill approach, what amount of stockholders' equity will be reported? a. P355,000 b. P397,000 c. P419,500 d. P495,000arrow_forwardPrepare the set of consolidated financial statement of financial position on the date of acquisition by showing the consolidation procedures.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education