ADVANCED FINANCIAL ACCOUNTING-ACCESS
ADVANCED FINANCIAL ACCOUNTING-ACCESS
12th Edition
ISBN: 9781260518740
Author: Christensen
Publisher: MCG
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Chapter 7, Problem 7.29P
To determine

Intercompany transfer of service:An intercompany frequently purchases services from each other. These services may be of many types; such as consultation services, marketing services, engineering and maintenance services, etc. When one company purchases services from a related company, the purchaser records it as an expense and seller records it as revenue. When consolidated financial statement is prepared, both expense and revenue is eliminated.

Presentation of consolidation entries needed at December 31 20X4 and 20X5 to prepare P’s consolidated financial statements.

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On December 1, B Company purchased a 4,000,000 tract of land for a factory site. The entity razed an old building on the property and sold the materials salvaged from the demolition. The entity incurred additional costs and realized a salvage proceeds during December as follows: Demolition of old building 200,000 Legal fees for the purchased contract and recording of ownership 150,000 Title guarantee insurance  50,000 Proceeds from sale of salvaged materials  20,000  In the December 31 statement of financial position, what is the carrying amount of the land?
French Vanilla Company commenced operations in the current year. A number of expenditures were made during the current year that were debited to one account Intangible asset. Incorporation fees and legal costs related to organizing the incorporation for P150,000 Fire Insurance premium for three-year period for 60,000 Legal fees for filing a patent on a new product resulting from an A&B project for 50,000 Purchase of copyright for 300,000 Legal fees for successful defense of the patent developed from the project for 50,000 Entered into a 10-year franchise agreement with a franchisor for 600,000 Advertising cost for 50,000 Purchase of all the outstanding ordinary shares of an acquire. On the date of purchase, the acquire had fair value of total assets, P6,000,000 and total liabilities of P2,200,000. for 5,000,00   What amount should be reported as intangible asset?
During the current fiscal year, Heinrich Corp. incurred the following costs related to property,  plant, and equipment:  Amount paid to the contractor for the building constructed P13,000,000 Building permit fee 120,000 Excavation cost 110,000 Architect fee 440,000 Interest that would have been earned had the money used during the    period of construction been invested in the money market 330,000 Invoice cost of machine acquired, terms 3/10, n/30 6,500,000 Freight, unloading and delivery charges for machine acquired 100,000 Custom duties and other charges 270,000 Allowance and hotel accommodation, paid to foreign technicians during    installation and test run of machine 520,000 Royalty payment on machines purchased (based on units produced    and sold) 240,000 Cash paid for the purchase of land (none was allocated to old building) 10,000,000 Mortgage assumed on the land purchased 2,100,000 Realtor’s commission 650,000 Legal fees, realty taxes and documentation expenses 900,000 Amount…

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ADVANCED FINANCIAL ACCOUNTING-ACCESS

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