Chapter 8, Problem 8.30BP

a

To determine

Introduction: Intercompany sale of bonds is a situation where the company sells its own bonds to its subsidiary. In this case, it cannot sale of bonds to its subsidiary as an investment in its own bonds to itself. Because when the consolidated entity, thus all amounts associated with intercompany obligation must be eliminated in consolidation worksheet. For this purpose, a consolidation worksheet is prepared to efficiently combining the accounts of the separate companies involved in the consolidation to report as a single company.

The journal entries recorded by B in books during 20X4 using cost method.

b

To determine

Introduction: Intercompany sale of bonds is a situation where the company sells its own bonds to its subsidiary. In this case, it cannot sale of bonds to its subsidiary as an investment in its own bonds to itself. Because when the consolidated entity, thus all amounts associated with intercompany obligation must be eliminated in consolidation worksheet. For this purpose, a consolidation worksheet is prepared to efficiently combining the accounts of the separate companies involved in the consolidation to report as a single company.

The elimination entries needed to complete consolidation worksheet using cost method.

c

To determine

Introduction: Intercompany sale of bonds is a situation where the company sells its own bonds to its subsidiary. In this case, it cannot sale of bonds to its subsidiary as an investment in its own bonds to itself. Because when the consolidated entity, thus all amounts associated with intercompany obligation must be eliminated in consolidation worksheet. For this purpose, a consolidation worksheet is prepared to efficiently combining the accounts of the separate companies involved in the consolidation to report as a single company.

A complete three part consolidation worksheet as of December 31, 20X4.