Concept explainers
a
Intercompany sale of bonds: When intercompany sale of bonds takes place between affiliates, all effects of intercompany indebtedness must be eliminated for the purpose of consolidated financial statements, as a company cannot report an investment in its own bonds or bond liability to itself. Thus when the consolidated entity is viewed as a single company, all amounts related to intercompany indebtedness are eliminated.
Actual bond retirement: When intercompany sale of bonds takes place between affiliates, all effects of intercompany indebtedness must be eliminated for the purpose of consolidated financial statements. This is referred to as retirement of bond, as a company cannot report an investment in its own bonds or bond liability to itself. Thus when the consolidated entity is viewed as a single company, all amounts related to intercompany indebtedness are eliminated.
The preparation of
b
Intercompany sale of bonds: When intercompany sale of bonds takes place between affiliates, all effects of intercompany indebtedness must be eliminated for the purpose of consolidated financial statements, as a company cannot report an investment in its own bonds or bond liability to itself. Thus when the consolidated entity is viewed as a single company, all amounts related to intercompany indebtedness are eliminated.
Actual bond retirement: When intercompany sale of bonds takes place between affiliates, all effects of intercompany indebtedness must be eliminated for the purpose of consolidated financial statements. This is referred to as retirement of bond, as a company cannot report an investment in its own bonds or bond liability to itself. Thus when the consolidated entity is viewed as a single company, all amounts related to intercompany indebtedness are eliminated.
the preparation of journal entries for 20X2 for P related to bonds.
c
Intercompany sale of bonds: When intercompany sale of bonds takes place between affiliates, all effects of intercompany indebtedness must be eliminated for the purpose of consolidated financial statements, as a company cannot report an investment in its own bonds or bond liability to itself. Thus when the consolidated entity is viewed as a single company, all amounts related to intercompany indebtedness are eliminated.
Actual bond retirement: When intercompany sale of bonds takes place between affiliates, all effects of intercompany indebtedness must be eliminated for the purpose of consolidated financial statements. This is referred to as retirement of bond, as a company cannot report an investment in its own bonds or bond liability to itself. Thus when the consolidated entity is viewed as a single company, all amounts related to intercompany indebtedness are eliminated.
the preparation elimination entries for consolidation worksheet as on December 31 20X2.

Want to see the full answer?
Check out a sample textbook solution
Chapter 8 Solutions
ADVANCED FIN. ACCT.(LL)-W/CONNECT
- Financial accounting problemarrow_forwardAssume that the retained earnings of Horizon Industries increased by $76,250 from December 31 of year 1 to December 31 of year 2. During year 2, the company declared and paid cash dividends totaling $18,500. Compute the net income for year 2.arrow_forwardI need financial accounting question answerarrow_forward
- Compute this year's accounts payable turnover ratio for Nashville.arrow_forwardNovaTech Manufacturing has a factory with fixed costs of $720,000 and a production capacity of 250,000 units annually. Its product sells with a 40% contribution margin. The target profit is $500,000. At full production, what does the selling price per unit need to be? Show your complete solution.arrow_forwardRiverfront Manufacturing estimated manufacturing overhead costs for 2024 at $525,000, based on 250,000 estimated direct labor hours. Actual direct labor hours for 2024 totalled 270,000. The manufacturing overhead account contains debit entries totaling $548,000. The manufacturing overhead for 2024 was a) $19,000 overallocated b) $19,000 under allocated c) $23,000 overallocated d) $23,000 underallocatedarrow_forward
- What is the gross margin for the month under absorption costing?arrow_forwardNewton Company prepared the following sales budget: Month Budgeted Sales July $8,400 August $10,500 September $12,600 October $9,800 The expected gross profit rate is 35% and the inventory at the end of June was $6,500. Desired inventory levels at the end of each month are 25% of the next month's cost of goods sold. What is the budgeted ending inventory for September in dollars?arrow_forwardPlease provide the accurate answer to this general accounting problem using appropriate methods.arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning

