a.
Introduction: Intragroup transactions are the transactions that occur between two companies in the industry. Instead of showing separate financial statement for two companies a single consolidated financial statement is prepared which constitute assets, liabilities, expenses, incomes of both companies.
The amount of gain or loss reported in B’s Income Statement
b.
Introduction: Consolidation is the process of summarizing and combining the financial statement of two companies into one. Consolidated net income is the sum total of net income of the holding company and net income of its subsidiary companies after deducting unrealized gain in inventories and income from intra-group transactions of the companies.
The amount of gain or loss for the year 20X6 for parent company.
c.
Introduction: Net income is a company's total profits after deducting all business expenses. Net income (NI) is also called net earnings. It is calculated as sales minus cost of goods sold, selling, general and administrative expenses, operating expenses,
To prepare: Calculate amount of gain or loss for the year 20X6 for parent company.
d.
Introduction: In preparing the consolidated financial statement, the sum owed by one company to the other company within the group should be eliminated, for intercompany transactions, and for this, the parent company eliminates the effect of intercompany transactions by making eliminating entries.
To prepare: Eliminating entries to remove effect of inter-corporate ownership of bonds in 20X6
e.
Introduction: In preparing the consolidated financial statement, the sum owed by one company to the other company within the group should be eliminated, for intercompany transactions, and for this, the parent company eliminates the effect of intercompany transactions by making eliminating entries.
To prepare: Worksheet eliminating entries to remove effect of inter-corporate ownership of bonds in 20X7.
f.
Introduction: Consolidation is the process of summarizing and combining the financial statement of two companies into one. Consolidated net income is the sum total of net income of the holding company and net income of its subsidiary companies after deducting unrealized gain in inventories and income from intra-group transactions of the companies.
To prepare: Calculate amount of gain or loss for the year 20X6 for parent company.
Want to see the full answer?
Check out a sample textbook solution
Chapter 8 Solutions
Advanced Financial Accounting
- 4 POINTSarrow_forwardWhat was its total assets turnover ratio on these financial accounting question?arrow_forwardNicole Manufacturing had 780 units in beginning work in process on September 1, 2023. During the month, an additional 2,600 units were started in production. At the end of September, 1,150 units remained in work in process. How many units were completed during September? Helparrow_forward
- During the current year, a business sells equipment for $440,000. The equipment cost $290,000 when purchased and placed in service two years ago and $85,000 of depreciation deductions were allowed. The results of the sale are ____. OPTIONS: A) ordinary income of $120,000. B) Sec. 1231 gain of $120,000. C) ordinary income of $90,000 and LTCL of $30,000. D) ordinary income of $85,000 and Sec. 1231 gain of $150,000.arrow_forwardDuring the current year, a business sells equipment for $440,000. The equipment cost $290,000 when purchased and placed in service two years ago and $85,000 of depreciation deductions were allowed. The results of the sale are ____. OPTIONS: A) ordinary income of $120,000. B) Sec. 1231 gain of $120,000. C) ordinary income of $90,000 and LTCL of $30,000. D) ordinary income of $85,000 and Sec. 1231 gain of $150,000.solve thisarrow_forwardMadison Industries uses the FIFO (first-in, first-out) method in its process costing system. The mixing department had $4,800 in material cost in its beginning work in process inventory, and $68,000 in material cost was added during the period. The equivalent units of production for materials during the period were 17,000 units. What is the cost per equivalent unit for materials?arrow_forward
- At the end of the year, the company has Assets of $180,000 and Liabilities of $140,000. At the beginning of the year, the company had Owners' Equity of $60,000. How much did Owners' Equity change by the end of the year? Did Owners' Equity increase or decrease? HELParrow_forwardOn January 1, 2020, Acme Corporation leased equipment to Zenith Company. The lease term is 10 years. The first payment of $850,000 was made on January 1, 2020. The equipment cost Acme Corporation $6,250,000. The present value of the minimum lease payments is $7,150,000. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease is 8%, how much interest revenue will Acme record in 2021 on this lease? a. $500,000 b. $504,000 c. $572,000 d. $624,000arrow_forwardHow many units were completedarrow_forward
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT