Describe the treatment of intercompany sale of non-depreciable asset and the sale of depreciable asset. Be...
Homework Answers
- Non-Depreciable Asset : The corresponding amount of the asset will be removed from the balance sheet at cost and difference between amount realised and the cost of the asset will be treated as income or loss in the income statement.eg Land
- Depreciable Asset: first it's depreciation for upto date of sale will be debited to the income statement, then amount realised for sale is debited as cash or bank and the asset being removed from the balance sheet, further the profit or loss on sales will be credited or debited to income statement respectively.
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Describe the treatment of intercompany sale of non-depreciable
asset and the sale of depreciable asset. Be...
E 6-7 Non-depreciable asset downstream sale Vasquez SA is a 90 percent-owned subsidiary of Fernando SA....
E 6-7 Non-depreciable asset downstream sale Vasquez SA is a 90 percent-owned subsidiary of Fernando SA. The book value of Vasquez SA was equal to fair value when Fernando SA acquired Vasquez SA. In 2013, Fernando SA sold land with a book value of $500,000 to Vasquez SA for $600,000. Vasquez SA's net income in 2013 and 2014 was $600,000 and $460,000, respectively. Vasquez SA sold the land to an outside party in 2014. cs REQUIRED 1. What is the...
Preparing a consolidated income statement Equity method with noncontrolling interest, AAP and upstream intercompany depreciable asset...
Preparing a consolidated income statement Equity method with noncontrolling interest, AAP and upstream intercompany depreciable asset profits A parent company purchased an 80% controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $460,000 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 $300,000 and to an unrecorded Customer List valued at $160,000. The building...
Statement I: Non-current assets (or long-term assets) can consist of both depreciable and non-depreciable assets. Statement...
Statement I: Non-current assets (or long-term assets) can consist of both depreciable and non-depreciable assets. Statement II: Depreciation is the allocation process of the cost of an asset (property or equipment) to expense over its useful life, in a rational and systematic way. Both statements are incorrect Both statements are correct Statement 1 is correct; statement 2 is incorrect Statement 1 is incorrect; statement 2 is correct
What is the basic accounting entry for an initial revaluation decrease of a non depreciable asset
What is the basic accounting entry for an initial revaluation decrease of a non depreciable asset
Prepare consolidation spreadsheet for intercompany sale of land - Equity method Assume that a parent company acquired i...
Prepare consolidation spreadsheet for intercompany sale of land - Equity method Assume that a parent company acquired its subsidiary on January 1, 2014, at a purchase price that was $300,000 in excess of the book value of the subsidiary's Stockholders' Equity on the acquisition date. Of that excess, $200,000 was assigned to an unrecorded Patent owned by the subsidiary that is being amortized over a 10-year period. The [A] Patent asset has been amortized as part of the parent's equity...
Prepare consolidation spreadsheet for intercompany sale of land - Equity Method Assume a parent company acquired...
Prepare consolidation spreadsheet for intercompany sale of land - Equity Method Assume a parent company acquired its subsidiary on January 1, 2017, at a purchase price that was $270,000 in excess of the book value of the subsidiary's Stockholders' Equity on the acquisition date. Of that excess, $180,000 was assigned to an unrecorded patent owned by the subsidiary that is being amortized over a 10 year period. The [A] Patent asset has been amortized as part of the parent's equity...
Credit Gain on Sale of an Asset Common Stock Retained Earnings Credit Credit Land Debit Notes...
Credit Gain on Sale of an Asset Common Stock Retained Earnings Credit Credit Land Debit Notes Payable Credit Fees Earned Credit Equipment Debit Sales Credit Accounts Receivable Debit Auto Expense Debit Rent Expense Debit Supplies Debit Cash Debit Accounts Payable Credit Service Revenue Credit Accumulated Depreciation-Equipment Credit Cash Dividends Debit Type here to search Paid in Capital in Excess of Par Credit Bonds Payable Credit Credit Unearned Revenue Salary Expense Debit Identify which financial statement each one of these accounts...
Non-operating expenses are found in the asset section of the balance sheet. liability section of the...
Non-operating expenses are found in the asset section of the balance sheet. liability section of the balance sheet. cash flows from financing section of the cash flow statement income statement D Question 2 2 pts Which one of the following events is not an operating transaction? Disposal of a business segment Foscope Purchase of equipment Payment for equipment maintenance Purchase of inventory
Prance, Inc., earns pretax book net income of $1,141,000 in 2019. Prance acquires a depreciable asset...
Prance, Inc., earns pretax book net income of $1,141,000 in 2019. Prance acquires a depreciable asset that year, and first-year tax depreciation exceeds book depreciation by $114,100. Prance reported no other temporary or permanent book-tax differences. The pertinent U.S. Federal corporate income tax rate is 21%, and Prance earns an after-tax rate of return on capital of 8%. Enter below the Prance's 2019 deferred tax expense and any deferred tax asset or liability. If required, round your answer to nearest...
Asset Disposal Assume that Tsua Enterprises purchased an asset on January 1, 2015, for $60,000. The...
Asset Disposal Assume that Tsua Enterprises purchased an asset on January 1, 2015, for $60,000. The asset had an estimated life of six years and an estimated residual value of $6,000. The company used the straight-line method to depreciate the asset. Assume that Tsua Enterprises sold the asset on July 1, 2017, and received $16,000 cash and a note for an additional $14,000. Required: 1. Identify and analyze the effect of the transaction for depreciation for 2017. Activity Accounts Statement(s)...
E 6-7 Non-depreciable asset downstream sale Vasquez SA is a 90 percent-owned subsidiary of Fernando SA. The book value of Vasquez SA was equal to fair value when Fernando SA acquired Vasquez SA. In 2013, Fernando SA sold land with a book value of $500,000 to Vasquez SA for $600,000. Vasquez SA's net income in 2013 and 2014 was $600,000 and $460,000, respectively. Vasquez SA sold the land to an outside party in 2014. cs REQUIRED 1. What is the...
Preparing a consolidated income statement Equity method with noncontrolling interest, AAP and upstream intercompany depreciable asset profits A parent company purchased an 80% controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $460,000 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 $300,000 and to an unrecorded Customer List valued at $160,000. The building...
Prepare consolidation spreadsheet for intercompany sale of land - Equity method Assume that a parent company acquired its subsidiary on January 1, 2014, at a purchase price that was $300,000 in excess of the book value of the subsidiary's Stockholders' Equity on the acquisition date. Of that excess, $200,000 was assigned to an unrecorded Patent owned by the subsidiary that is being amortized over a 10-year period. The [A] Patent asset has been amortized as part of the parent's equity...
Credit Gain on Sale of an Asset Common Stock Retained Earnings Credit Credit Land Debit Notes Payable Credit Fees Earned Credit Equipment Debit Sales Credit Accounts Receivable Debit Auto Expense Debit Rent Expense Debit Supplies Debit Cash Debit Accounts Payable Credit Service Revenue Credit Accumulated Depreciation-Equipment Credit Cash Dividends Debit Type here to search Paid in Capital in Excess of Par Credit Bonds Payable Credit Credit Unearned Revenue Salary Expense Debit Identify which financial statement each one of these accounts...
Non-operating expenses are found in the asset section of the balance sheet. liability section of the balance sheet. cash flows from financing section of the cash flow statement income statement D Question 2 2 pts Which one of the following events is not an operating transaction? Disposal of a business segment Foscope Purchase of equipment Payment for equipment maintenance Purchase of inventory
Prance, Inc., earns pretax book net income of $1,141,000 in 2019. Prance acquires a depreciable asset that year, and first-year tax depreciation exceeds book depreciation by $114,100. Prance reported no other temporary or permanent book-tax differences. The pertinent U.S. Federal corporate income tax rate is 21%, and Prance earns an after-tax rate of return on capital of 8%. Enter below the Prance's 2019 deferred tax expense and any deferred tax asset or liability. If required, round your answer to nearest...
Asset Disposal Assume that Tsua Enterprises purchased an asset on January 1, 2015, for $60,000. The asset had an estimated life of six years and an estimated residual value of $6,000. The company used the straight-line method to depreciate the asset. Assume that Tsua Enterprises sold the asset on July 1, 2017, and received $16,000 cash and a note for an additional $14,000. Required: 1. Identify and analyze the effect of the transaction for depreciation for 2017. Activity Accounts Statement(s)...
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