Advanced Financial Accounting
Advanced Financial Accounting
11th Edition
ISBN: 9780078025877
Author: Theodore E. Christensen, David M Cottrell, Cassy JH Budd Advanced Financial Accounting
Publisher: McGraw-Hill Education
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Chapter 7, Problem 7.30P

a

To determine

Concept introduction:

Intercompany transfers: When the intercompany transfer of asset occurs, the parent company must make adjustments in preparing consolidated financial statements as long as the asset is held by the acquiring company. When the asset is transferred at book value no special adjustments are needed. 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 an unrelated party. Moreover in the consolidation, the gain or loss will be eliminated.

The journal entry made by B to record sale of equipment 20X6.

b

To determine

Concept introduction:

Intercompany transfers: When the intercompany transfer of asset occurs, the parent company must make adjustments in preparing consolidated financial statements as long as the asset is held by the acquiring company. When the asset is transferred at book value no special adjustments are needed. 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 an unrelated party. Moreover in the consolidation, the gain or loss will be eliminated.

The elimination entries for intercompany transfer of land and equipment for consolidated financial statements for 20X7.

c

To determine

Intercompany transfers: When the intercompany transfer of asset occurs, the parent company must make adjustments in preparing consolidated financial statements as long as the asset is held by the acquiring company. When the asset is transferred at book value no special adjustments are needed. 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 an unrelated party. Moreover in the consolidation, the gain or loss will be eliminated.

The subsidiaries reported net income 20X7

d

To determine

Concept introduction:

Intercompany transfers: When the intercompany transfer of asset occurs, the parent company must make adjustments in preparing consolidated financial statements as long as the asset is held by the acquiring company. When the asset is transferred at book value no special adjustments are needed. 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 an unrelated party. Moreover in the consolidation, the gain or loss will be eliminated.

The B’s income from its own operation excluding investments for 20X7.

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Advanced Financial Accounting

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