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.
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Chapter 8 Solutions
ADVANCED FIN. ACCT. LL W/ACCESS>CUSTOM<
- On August 1, 2022, Fletcher Corporation sells machinery for $180,000. The machinery originally cost $500,000, had an estimated 5-year life, and an expected salvage value of $50,000. The Accumulated Depreciation account had a balance of $325,000 on January 1, 2022, using the straight-line method. The gain or loss on disposal is__.arrow_forwardHello teacher please help me this question solutionarrow_forwardHow much is the gross profit margin?arrow_forward
- Ans ?arrow_forwardMint Corp. began operations on January 1, Year 1, and had the following items for the year: Sales revenue $6,680,000 Costs and expenses (excluding income taxes) 5,180,000 Dividends declared 160,000 Dividends payable 50,000 Mint's tax rate is 30%. In Mint's December 31, Year 1, balance sheet, what amount should be reported as total retained earnings? A. $890,000 B. $940,000 C. $1,050,000 D. $1,500,000 Explanation Retained earnings is the accumulated net income (loss) of an entity since its inception, less the accumulated declareddividends to shareholders (ie, the income/earnings still retained in the business). At the end of each accounting period, net income and dividends are closed into retained earnings to update the account for the financial statements. Mint's net income is $1,500,000 before taxes and $1,050,000 after taxes (Choices C and D): Sales revenues $6,680,000 Less: Costs and expenses (before…arrow_forwardHow much is the direct labor price variance? Please given solutionarrow_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
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