Homework Answers
a.
| $ | ||
| 1-Jan-21 | p com sold the land | 700000 |
| 1-Jan-20 | purchase price | 600000 |
| Capital gain on sale of land | 100000 |
b.
| $ | |
| Total gain on sale of land | 200000+100000 |
| 300000 |
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EXERCISE 7-6 Calculating Gain on Sale LO 9 P Company owns 90% of the outstanding common...
P Company owns 90% of the outstanding common stock of S Company. On January 1, 2015,...
P Company owns 90% of the outstanding common stock of S Company.
On January 1, 2015, S Company sold land to P Company for $566,500.
S Company originally purchased the land for $414,900.
On January 1, 2016, P Company sold the land purchased from S
Company to a company outside the affiliated group for $666,100.
Calculate the amount of gain on the sale of the land that is
recognized on the books of P Company in 2016.
PROBLEM 7-3 P Company Entries and Determining Gain or Loss on Sale LO 6 LO 9...
PROBLEM 7-3 P Company Entries and Determining Gain or Loss on Sale LO 6 LO 9 On January 1, 2020, P Company purchased equipment from its 80% owned subsidiary for $600,000. The carrying value of the equipment on the books of S Company was $450,000. The equipment had a remaining useful life of six years on January 1, 2020. On January 1, 2021, P Company sold the equipment to an outside party for $550,000. Required: A. Prepare in general journal...
3) Prince Company owns 104,000 of the 130,000 shares outstanding of Serf Corporation. Serf Corporation sold...
3) Prince Company owns 104,000 of the 130,000 shares outstanding of Serf Corporation. Serf Corporation sold equipment to Prince Company on January 1, 2017 for $740,000. The equipment was originally purchased by Serf Corporation on January 1, 2013 for $1,280,000 and at that time its estimated depreciable life was 8 years. The equipment is estimated to have a remaining useful life of four years on January 1, 2017. Both companies use the straight-line method to depreciate equipment. Required: A. Prepare,...
Peel Company owns 90% of the common stock of Seacore Company. Seacore Company sells merchandise to...
Peel Company owns 90% of the common stock of Seacore Company.
Seacore Company sells merchandise to Peel Company at 20% above
cost. During 2014 and 2015, such sales amounted to $451,400 and
$482,600, respectively. At the end of each year, Peel Company had
in its inventory one-fourth of the goods purchased from Seacore
Company during that year.
Peel Company reported $309,400 in net income from its independent
operations in 2014 and 2015. Seacore Company reported net income of
$117,600 in...
10) P Company purchased 90% of the outstanding common stock of S Company on January 1,...
10) P Company purchased 90% of the outstanding common stock of S Company on January 1, 2013 . S Company’s stockholders’ equity at various dates was: 1/1/13 1/1/17 12/31/17 Common stock $400,000 $400,000 $400,000 Retained earnings 120,000 380,000 460,000 Total $520,000 $780,000 $860,000 The workpaper entry to establish reciprocity under the cost method in the preparation of a consolidated statements workpaper on December 31, 2017 should include a credit to P Company’s retained earnings of: a) $80,000. b) $234,000. c)...
P Company owns 80% of the outstanding stock of S Company. During 2014, S Company reported...
P Company owns 80% of the outstanding stock of S Company. During 2014, S Company reported net income of $500,120 and declared no dividends. At the end of the year, S Company’s inventory included $442,130 in unrealized profit on purchases from P Company. Intercompany sales for 2014 totaled $2,962,200. Calculate the amount of the noncontrolling interest to be deducted from consolidated income in arriving at 2014 controlling interest in consolidated net income.
On January 1, 20X7, P Company acquired 60 percent of the outstanding common stock of S...
On January 1, 20X7, P Company acquired 60 percent of the outstanding common stock of S Company at the book value of the shares acquired. On that date, the fair value of noncontrolling interest was equal to 40 percent of book value of S. At the time of purchase, S had common stock of $1,000,000 outstanding and retained earnings of $800,000. On December 31, 20X7, P purchased 50 percent of S's bonds outstanding which were originally issued on January 1,...
On January 1, 20X7, P Company acquired 60 percent of the outstanding common stock of S...
On January 1, 20X7, P Company acquired 60 percent of the outstanding common stock of S Company at the book value of the shares acquired. On that date, the fair value of noncontrolling interest was equal to 40 percent of book value of S. At the time of purchase, S had common stock of $1,000,000 outstanding and retained earnings of $800,000. On December 31, 20X7, P purchased 50 percent of S's bonds outstanding which were originally issued on January 1,...
Emron Company owns a 100% interest in the common stock of the Dietz Company. On January...
Emron Company owns a 100% interest in the common stock of the Dietz Company. On January 1, 2016, Emron sold Dietz a fixed asset that Dietz will use over a 5-year period. The asset was sold at a $5,000 profit. In the consolidated statements, this profit will a. not be recorded. b. be recognized over 5 years. c. be recognized in the year of sale. d. be recognized when the asset is resold to outside parties at the end of...
5. On January 1, 2019, P acquired all of the outstanding common stock of S for $1,000,000. On the...
need the answer to Part B only
5. On January 1, 2019, P acquired all of the outstanding common stock of S for $1,000,000. On the date of acquisition, the book value and fair market value of S's assets and liabilities were as follows: Book Value 200,000 300,000 160,000 340,000 Fair Market Value 300,000 500,000 Land Patent (10 yrs) Common Stock Retained Earnings a) Assuming that S uses push-down accounting, prepare the elimination entries as of 1/1/19. b) If P...
P Company owns 90% of the outstanding common stock of S Company.
On January 1, 2015, S Company sold land to P Company for $566,500.
S Company originally purchased the land for $414,900.
On January 1, 2016, P Company sold the land purchased from S
Company to a company outside the affiliated group for $666,100.
Calculate the amount of gain on the sale of the land that is
recognized on the books of P Company in 2016.
PROBLEM 7-3 P Company Entries and Determining Gain or Loss on Sale LO 6 LO 9 On January 1, 2020, P Company purchased equipment from its 80% owned subsidiary for $600,000. The carrying value of the equipment on the books of S Company was $450,000. The equipment had a remaining useful life of six years on January 1, 2020. On January 1, 2021, P Company sold the equipment to an outside party for $550,000. Required: A. Prepare in general journal...
Peel Company owns 90% of the common stock of Seacore Company.
Seacore Company sells merchandise to Peel Company at 20% above
cost. During 2014 and 2015, such sales amounted to $451,400 and
$482,600, respectively. At the end of each year, Peel Company had
in its inventory one-fourth of the goods purchased from Seacore
Company during that year.
Peel Company reported $309,400 in net income from its independent
operations in 2014 and 2015. Seacore Company reported net income of
$117,600 in...
need the answer to Part B only
5. On January 1, 2019, P acquired all of the outstanding common stock of S for $1,000,000. On the date of acquisition, the book value and fair market value of S's assets and liabilities were as follows: Book Value 200,000 300,000 160,000 340,000 Fair Market Value 300,000 500,000 Land Patent (10 yrs) Common Stock Retained Earnings a) Assuming that S uses push-down accounting, prepare the elimination entries as of 1/1/19. b) If P...
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