Topic:
Intercompany Transactions and Consolidation.
Questions:
What would be the effect on the financial statements if the intercompany profits were not eliminateCd?
Topic: Intercompany Transactions and Consolidation. Questions: What would be the effect on the financial statements if...
In consolidation of Perpetual Industries and Sand Hill Company at December 31,2020, you assemble the following data related to unconfirmed intercompany profits: January 1,2020 December 31,2020 Land 4,000,000 4,000,000 Merchandise Inventory 2,400,000 2,200,000 Equipment 1,200,000 1,050,000 The equipment is carried on the purchasing affiliate's books at a cost of $6,000,000 and accumulated depreciation of $1,800,000(straight-line, no salvage value) at December 31,2020. Accumulated depreciation at the date of intercompany sale was $1,000,000; the original intercompany gain was $1,500,000. Intercompany merchandise sales...
Why is it important that intercompany transactions are eliminated prior to issuing financial reports? How would that item would be adjusted at the end of a reporting cycle. Please explain in detail.
Consolidation Working Paper, Noncontrolling Interest, Intercompany Inventory Transactions Peninsula Industries and Seaport Company, an 85 percent owned subsidiary, engage in extensive intercompany transactions involving raw material,component parts,and completed products. Peninsula acquired its interest in Seaport several years ago, at a cost of $24,575,000. At that time, Seaport's book value was $1,500,000 and the fair value of the noncontrolling interest in Seaport was $2,925,000. The excess of acquisition cost over book value was attributed to previously unrecorded indefinite-lived intangibles, valued at...
2. (4 pts) What would be the effect on the financial statements, of recording the purchase of a forklift for $20,000? A down payment of $4,000 was made and a six-month note at 10% interest was signed for life of four years and a $4,000 salvage value. Straight-line depreciation will be used. The truck was purchased January 1st and the company's year-end is December 31st For each type of account, indicate the dollar ($) amount of the increase or decrease...
Which financial accounting topic do you believe is the most researched one? Revenue? Derivatives? Consolidation or another topic? why?
"Consolidated Financial Statements – Intra-Entity Asset Transactions" The consolidation process required for the intra-entity transfer of depreciable assets is different from the requirements for inventory and land. Analyze the current consolidation process for intra-entity transfer of depreciable assets and suggest at least one (1) improvement to the process. Provide an example to support your recommendation. Assume that company P (parent) uses the equity method to account for its investment in company S (subsidiary). Company P purchases inventory items from company...
Preparing a consolidated income statement-Cost method with noncontrolling interest, AAP and upstream and downstream intercompany inventory profits A parent company purchased a 70% controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $300,000 in excess of the subsidiary's Stockholders' Equity on the acquisition date. This excess was assigned to a building that was estimated to be undervalued by $180,000 and to an unrecorded Trademark valued at $120,000. The building asset...
Preparing a consolidated income statement—Cost method with noncontrolling interest, AAP and upstream and downstream intercompany inventory profits A parent company purchased a 70% controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $300,000 in excess of the subsidiary’s Stockholders’ Equity on the acquisition date. This excess was assigned to a building that was estimated to be undervalued by $180,000 and to an unrecorded Trademark valued at $120,000. The building asset...
Multiple Choice Account questions 1.The effect of an adjustment on the financial statements is usually to: a.Match revenues and assets b.increase net income c.make the balance sheet balance d.increase the accuracy of both the balance sheet and income statement 2.The balance in the wages payable account was $25,000 at the beginning of the month. Wages accrued during the month totaled $54,000. Wages paid during the month were $63,000 a.wages expenses for the month totaled $79,000 b.wages expense for the month...
The consolidation of financial statements for entities with subsidiaries in multiple countries presents the most challenging difference between IFRS and US GAAP. It would make the most sense for an expanding global economy, that each country agrees upon one way of processing and presenting financial data. This migration may eventually happen, but will most certainly take some time and be quite costly (Forgeas, 2008). IFRS and US GAAP differ in determining how financial statements are consolidated on the basis of...