ADVANCED FIN. ACCT. LL W/ACCESS>CUSTOM<
ADVANCED FIN. ACCT. LL W/ACCESS>CUSTOM<
12th Edition
ISBN: 9781265074623
Author: Christensen
Publisher: MCG CUSTOM
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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?
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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 FIN. ACCT. LL W/ACCESS>CUSTOM<

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