ADV.FIN.ACCT. CONNECT+PROCTORIO PLUS
ADV.FIN.ACCT. CONNECT+PROCTORIO PLUS
12th Edition
ISBN: 9781266379017
Author: Christensen
Publisher: INTER MCG
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Chapter 9, Problem 9.27P
To determine

Introduction:

Reciprocal ownership: A reciprocal relationship is when two companies hold stock in each other. It is rare in practice. The method of dealing with reciprocal relationships found mostly in the treasury stock method. Under the treasury stock method, purchases of a parent’s stock by the subsidiary are treated in the same way as if the parent had repurchased its own stock and was holding it in the treasury. The subsidiary will account for it as an investment in parent’s stock using the cost method as such investments usually are small and almost never has the ability to significantly influence parent.

Income assigned to the non-controlling interest in the subsidiary should be based on the subsidiary’s separate income excluding the dividend income from investment in the parent. The parent normally bases its equity-method share of the subsidiary’s excluding dividends from the parent.

The consolidated net income and the income assigned to the non-controlling shareholders of G and P for 20X7 using treasury stock method.

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On January 1, Jack Corp.'s Work-in-Process Inventory account had a balance of $29,600. During the year, $62,400 of direct materials was placed into production. Manufacturing wages incurred amounted to $88,500, of which $66,000 were for direct labor. Manufacturing overhead is allocated on the basis of 125% of direct labor cost. Actual manufacturing overhead was $92,800. Jobs costing $230,700 were completed during the year. What is the December 31 balance of Work-in-Process Inventory?
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