Intercompany sales: An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method. Requirement 1 Amount paid by P to S on sale of building.

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Answer 1

Question

Chapter 7, Problem 7.27P

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 1

Amount paid by P to S on sale of building.

b.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 2

The amount accumulated depreciation did S reports on January 1 20X7.

c.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 3

Amount of annual depreciation S recorded prior to sale.

d.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 4

The residual value of building

e.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 5

Amount of depreciation expense did P record in 20X7.

f.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 6

The income assigned to non-controlling interest when net income is $80,000.

g.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 7

The income assigned to non-controlling interest when net income is $65,000.

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L.L. Bean operates two factories that produce its popular Bean boots (also known as "duck boots") in its home state of Maine. Since L.L. Bean prides itself on manufacturing its boots in Maine and not outsourcing, backorders for its boots can be high. In 2014, L.L. Bean sold about 450,000 pairs of the boots. At one point during 2014, it had a backorder level of about 100,000 pairs of boots. L.L. Bean can manufacture about 2,200 pairs of its duck boots each day with its factories running 24/7. In 2015, L.L. Bean expects to sell more than 500,000 pairs of its duck boots. As of late November 2015, the backorder quantity for Bean Boots was estimated to be about 50,000 pairs. Question: 1. Assume that 5% of the L.L. Bean boots are returned by customers for various reasons. L. Bean has a 100% refund policy for returns, no matter what the reason. What would the journal entry be to accrue L.L. Bean's sales returns for this one pair of boots? (Note: L.L. Bean most likely will make…

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Answer 2

Question

Chapter 7, Problem 7.27P

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 1

Amount paid by P to S on sale of building.

b.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 2

The amount accumulated depreciation did S reports on January 1 20X7.

c.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 3

Amount of annual depreciation S recorded prior to sale.

d.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 4

The residual value of building

e.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 5

Amount of depreciation expense did P record in 20X7.

f.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 6

The income assigned to non-controlling interest when net income is $80,000.

g.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 7

The income assigned to non-controlling interest when net income is $65,000.

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Answer 3

Question

Chapter 7, Problem 7.27P

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 1

Amount paid by P to S on sale of building.

b.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 2

The amount accumulated depreciation did S reports on January 1 20X7.

c.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 3

Amount of annual depreciation S recorded prior to sale.

d.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 4

The residual value of building

e.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 5

Amount of depreciation expense did P record in 20X7.

f.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 6

The income assigned to non-controlling interest when net income is $80,000.

g.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 7

The income assigned to non-controlling interest when net income is $65,000.

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Answer 4

Question

Chapter 7, Problem 7.27P

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 1

Amount paid by P to S on sale of building.

b.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 2

The amount accumulated depreciation did S reports on January 1 20X7.

c.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 3

Amount of annual depreciation S recorded prior to sale.

d.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 4

The residual value of building

e.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 5

Amount of depreciation expense did P record in 20X7.

f.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 6

The income assigned to non-controlling interest when net income is $80,000.

g.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 7

The income assigned to non-controlling interest when net income is $65,000.

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Answer 5

Chapter 7, Problem 7.27P

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 1

Amount paid by P to S on sale of building.

b.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 2

The amount accumulated depreciation did S reports on January 1 20X7.

c.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 3

Amount of annual depreciation S recorded prior to sale.

d.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 4

The residual value of building

e.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 5

Amount of depreciation expense did P record in 20X7.

f.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 6

The income assigned to non-controlling interest when net income is $80,000.

g.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 7

The income assigned to non-controlling interest when net income is $65,000.

Answer 6

Chapter 7, Problem 7.27P

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 1

Amount paid by P to S on sale of building.

Answer 7

Chapter 7, Problem 7.27P

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 1

Amount paid by P to S on sale of building.

Answer 8

b.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 2

The amount accumulated depreciation did S reports on January 1 20X7.

Answer 9

b.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 2

The amount accumulated depreciation did S reports on January 1 20X7.

Answer 10

c.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 3

Amount of annual depreciation S recorded prior to sale.

Answer 11

c.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 3

Amount of annual depreciation S recorded prior to sale.

Answer 12

d.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 4

The residual value of building

Answer 13

d.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 4

The residual value of building

Answer 14

e.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 5

Amount of depreciation expense did P record in 20X7.

Answer 15

e.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 5

Amount of depreciation expense did P record in 20X7.

Answer 16

f.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 6

The income assigned to non-controlling interest when net income is $80,000.

Answer 17

f.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 6

The income assigned to non-controlling interest when net income is $80,000.

Answer 18

g.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 7

The income assigned to non-controlling interest when net income is $65,000.

Answer 19

g.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 7

The income assigned to non-controlling interest when net income is $65,000.

Answer 20

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Answer 21

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Answer 22

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Answer 23

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 sales are recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss.

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Chapter 7 Solutions