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Push Down Accounting: 8. Push-down accounting A) kequires a subsidiary to use the same accounting principles as its par...
17. A parent company consolidates its 80%-owned subsidiary. It is now December 31, 2021. The following...
17. A parent company consolidates its 80%-owned subsidiary. It is now December 31, 2021. The following information is available: • The subsidiary's reported net income for 2021 is $30,000. • The subsidiary sells merchandise to the parent at a markup of 15% on cost. The parent's 2021 ending inventory balance contains $1,725 in merchandise purchased from the subsidiary. The parent's 2021 beginning inventory contains $2,300 in merchandise purchased from the subsidiary. Total sales price of merchandise transferred between the subsidiary...
The following information is available concerning transactions between a parent and its wholly-owned subsidiary for the...
The following information is available concerning transactions between a parent and its wholly-owned subsidiary for the current year. The subsidiary purchased land from its parent in a prior year, at a cost of $400,000. The parent had reported the land on its books at $300,000. The parent sells merchandise to the subsidiary. The subsidiary’s beginning inventory includes intercompany profit of $50,000, and its ending inventory includes intercompany profit of $65,000. Total sales from the parent to the subsidiary were $600,000....
Intercompany Transactions – Equity Method 60 points Parent purchased 100% of a Subsidiary on January 1,...
Intercompany Transactions – Equity Method 60 points Parent purchased 100% of a Subsidiary on January 1, 2020. The excess of investment cost over book value of $350,000 was allocated entirely to a 7-year royalty agreement. The parent uses the equity method to account for its investment in its subsidiary. In 2021, Subsidiary sold to Parent land having a book value of $90,000 for a total price of $244,000. On January 2, 2022, Parent sold equipment to Subsidiary for $120,000. The...
Subsidiary 46. Prepare consolidation spreadsheet for intercompany sale of land-Equity method LOS Assume a parent company...
Subsidiary 46. Prepare consolidation spreadsheet for intercompany sale of land-Equity method LOS 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. X 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...
J. Retained earnlllg on-Equity e. Equity investment Assume that your company acquired a subsidiary on January...
J. Retained earnlllg on-Equity e. Equity investment Assume that your company acquired a subsidiary on January 1, 2013. The purchase price $1,463,000 in excess of the subsidiary's book value of Stockholders' Equity on the acquisition date, 39. Determi method ining ending consolidated balances in the fourth year following the acquisition that excess was assigned to the following [A] assets: Original Original Amount Useful Life A] Asset .496,000 355,000 $ 612,000 12 years 8 years Indefinite $1,463,000 The [A] assets with...
Consolidation spreadsheet for continuous sale of inventory-Equity method
Consolidation spreadsheet for continuous sale of inventory-Equity method Assume a parent company acquired a subsidiary on January 1. 2016. The purchase price was S600,000 in excess of the subsidiary's book value of Stockholders' Equity on the acquisition date, and that excess was assigned to the following AAP assets: The AAP assets with a definite useful life have been amortized as part of the parent's equity method accounting. The Goodwill asset has been tested annually for impairment, and has not been found to...
When a parent company uses the equity method to account for investment in a subsidiary, the...
When a parent company uses the equity method to account for investment in a subsidiary, the amortization expense entry recorded during the year is eliminated on a consolidation worksheet as a component of Entry I. What is the necessity of removing this amortization? Please explain in detail.
"Push-down Accounting and the Recording of Both Tangible Assets and Intangible Assets" Imagine you are the...
"Push-down Accounting and the Recording of Both Tangible Assets and Intangible Assets" Imagine you are the chief financial officer (CFO) of a corporation with plans to complete the acquisition of a key subsidiary during the current year. Your chief executive officer (CEO) has requested a presentation to the Board of Directors describing the methods available to account for the acquisition internally and the best method for the company during the acquisition year. Please assess the value of each method identified...
Assume that a parent company owns 75 percent of its subsidiary. On January 1, 2016, the...
Assume that a parent company owns 75 percent of its subsidiary. On January 1, 2016, the parent company had a $100,000 (face value) 8 percent bond payable outstanding with a carrying value of $94,000. Several years ago, the bond was originally issued to an unaffiliated company for 92% of par value. On January 1, 2016, the subsidiary acquired the bond for $91,000. During 2016, the parent company reported $400,000 of (pre-consolidation) income from its own operations (prior to any equity...
Parent purchased Subsidiary on January 1, 2015. The parent uses the equity method to account for...
Parent purchased Subsidiary on January 1, 2015. The parent uses the equity method to account for its investment in its subsidiary. The excess of investment cost over book value was allocated as follows: Equipment (20-yr life) $ 130,000 Customer list (10-yr life) 184,000 Patent (10-yr life) 147,000 Goodwill 139,000 Total $ 600,000 Parent regularly sells merchandise to Subsidiary. In 2017, inter-company sales amounted to $50,100, with $16,300 of deferred profit remaining in ending inventory. Year-end inter-company receivables/payables amounted to $18,900....
17. A parent company consolidates its 80%-owned subsidiary. It is now December 31, 2021. The following information is available: • The subsidiary's reported net income for 2021 is $30,000. • The subsidiary sells merchandise to the parent at a markup of 15% on cost. The parent's 2021 ending inventory balance contains $1,725 in merchandise purchased from the subsidiary. The parent's 2021 beginning inventory contains $2,300 in merchandise purchased from the subsidiary. Total sales price of merchandise transferred between the subsidiary...
Subsidiary 46. Prepare consolidation spreadsheet for intercompany sale of land-Equity method LOS 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. X 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...
J. Retained earnlllg on-Equity e. Equity investment Assume that your company acquired a subsidiary on January 1, 2013. The purchase price $1,463,000 in excess of the subsidiary's book value of Stockholders' Equity on the acquisition date, 39. Determi method ining ending consolidated balances in the fourth year following the acquisition that excess was assigned to the following [A] assets: Original Original Amount Useful Life A] Asset .496,000 355,000 $ 612,000 12 years 8 years Indefinite $1,463,000 The [A] assets with...
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