1 Parent company transferred inventory to its 60% owned subsidiary in 2020, The transfer price was $240,000 and the goods cost S180,000. Bythe end of the year inventory on hand are valued at $48,000 transfer price. Parent company uses the equity method in its intemal records.Khalid prepared the following consolidation entry "G without amounts in 2021:"GInvestment in Subsidiary (60%)Retained Earnings-Subsidiary (40%)XXXXXXCost of Goods SoldRequired:i Do you agree with Khalid?2 If you don't agroe calculate the necessary amount and record the proper journal entry

I agree with the Khalid consolidation entry as the transfer price is $240,000 which is 60% of the…

Answered: pany transferre the year invento pared…

Business

Accounting

pany transferre the year invento pared the follows tin Subsidiary (e Esidi armings-Sub st of Goods Sol

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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In May 2020, a parent sold inventories to a subsidiary entity for $60 000. The inventories had previously cost the parent entity $48 000. The entire inventory is still held by the subsidiary at reporting date, 30 June 2020. Ignoring tax effects, which of the following is the adjustment entry in the consolidation worksheet at reporting date? a. Cash Dr 48 000 Sales revenue Cr 48 000 Cost of sales Dr 48 000 Inventories Cr 48 000 b. Sales revenue Dr 48 000 Cash Cr 48 000 Inventories Dr 48 000 Cost of sales Cr 48 000 c. Cost of sales Dr 60 000 Sales revenue Cr 12 000 Inventories Cr 48 000 d. Sales revenue Dr 60 000 Cost of sales Cr 48 000 Inventories Cr 12 000 Answer (write…
During 2019, Subsidiary company, Sim had reported a net income $ 41,600 and declared dividends $ 12,000. The current amortization of acquisition price is $ 3,600. Intercompany sales from Subsidiary to Parent company, during 2019 were $ 2,600. Intercompany profit in ending inventory is $ 2,400 and intercompany profit in beginning inventory $ 1,200. Parent Company Pal had acquired 80% of subsidiary, Sim. What is the share of NCI in Subsidiarys net income for the year 2019? Select one: O a. 7,200 O b. 7,300 O c. 7,360 O d. 7,400
1. P Company acquired 70% interest in S Company in 2019. S reported net income of P80,000 and P90,000 for 2019 and 2020 respectively. During 2019, S sold merchandise to P for P10,000 at a profit of P2,000. The merchandise was later resold by P to outsiders for P15,000 during 2020. For consolidation purposes, what is the non-controlling interest in net income of S for 2020? * Your answer
P company acquired 70% interest in S Company in 2019. S reported net income of 80,000 and 90,000 for 2019 and 2020 respectively. During 2019, S sold merchandise to P for 10,000 at a profit of 2,000. The merchandise was later resold by P to outsiders for 15,000 during 2020. For consolidation purposes, what is the non- controlling interest in net income of S for 2020?
The parent acquired 75% of the ordinary shares of Sub with acquired control. The summarized statem ent of profit or loss of the two companies for the year ending February 29, 2020, is given below. Sub sold goods to Parent for $8000. It had bought these goods for $6000. 40% of these goods rem ainine3d in Parent's inventory on February 29, 2020. Prepared consolidated statement of profit and loss in a suitable format Parent Sub Sales 87,000 45,000 (19,000) 26,000 (9,800) 16,200 4,536 Cost of Sales (54,000) 33,000 (13,500) 19,500 5,460 Gross Profit Operating Expenses Profit before tax Income tax expense Profit for the year 14,040 11,664
On August 31, 2020, Southampton Co. acquired all of the common stock of Brighton Company, which became a division of Southampton Co. Brighton Company reported the followir statement of financial position at the time of the acquisition: Brighton Company Statement of Financial Position Assets Equity and Liabilities Share capital- Plant assets (ne t) $1,350,000 $1,150,000 ordinary 235,000 Retained earnings Inventory Receivables 1,070,000 587.000 800,000 Accounts payable Cash 422.000 Total assets $2.807.000 Total equity and liabilities $2.807.000 An appraisal indicated that the fair value of the inventory was $372,000 and the fair value of the plant assets was $1,550,000. The agreed purchase price was $3,600,000, and this amount was paid in cash to the previous owners of Brighton Company. Required: a. Prepare the entry to record the purchase of Brighton Company. b. Assume that the carrying amount of Brighton Company division's net assets, including goodwill is $2.550,000. The recoverable…
On January 1, 2021, PCO purchased 70% ownership of SCO which resulted to a gainon acquisition of P100,000. Net assets of SCO were fairly valued except for inventorywhich was understated by P1,500,000. A third of these inventories remained unsoldas of the end of the calendar year.The operations of the two companies for 2021 are as follows:PCO SCOSales P3,100,000 P2,600,000(COGS) (1,300,000) (1,250,000)Gross profit 1,800,000 1,350,000(OPEX) (200,000) (150,000)1,550,0003,550,0001,850,0003,250,000Other income 0 200,000(Other expenses) (120,000) 0Net income P1,480,000 P 400,000In the consolidated statement of comprehensive income for the year endedDecember 31, 2021, how much is the cost of goods sold? A. 1,550,000B. 3,550,000C. 1,850,000D. 3,250,000 based on the information above, In the consolidated statement of comprehensiveincome for the year ended December 31, 2021, how much is the consolidated netincome attributable to the controlling interest? 1,830,0001,980,0001,760,0001,860,000
The following are summarized Balance Sheets as on March 31, 2020 H. Ltd. acquired 80% shares in S Ltd. on October 1, 2019 for $ 2,000. At the date of acquisitionall the assets and liabilities of S Ltd were reflected at fair valueThe Retained earnings of S Ltd. on April 1, 2019 was $ 200H Ltd measures the Non Controlling Interest at its proportionate share of the acquiree's netidentifiable assets.S Ltd transferred goods to H Ltd at a transfer price of $ 300. The sales policy of H Ltd is to add50 % of mark up to its cost. Two-thirds remained in inventory at the year end. Required : Calculate goodwill at the date of acquisition and unrealized profit for holding company
SUBSEQUENT TO DATE OF ACQUISITION CHAPTER 3: CONSOLIDATION- 21. Patriotism Company purchased 70% of Strength Company on January 2, 2022 for P420,000. At that date Strength had inventory and plant assets with market values greater than book values in the amount of P50,000 and P90,000, respectively. The inventory and plant assets were assigned to have a remaining life of six months and five years, respectively. Strength Company has 2022 income and dividends of P160,000 and P60,000, respectively and 2023 income and dividends of P210,000 and P80,000, respectively. The balance of non-controlling interest account on December 31. 180,000 NU beg (420K 787. x30%.) 2023 must be: a. P223,200 b. P276,000 P169,200 с. d. P136,800 22. Jenny Company acquired 80% of the equity share capital of Smith
Assume a parent company acquired its subsidiary on January 1, 2016. On January 1, 2016, the subsidiary’s retained earnings was $637,500. During the year ended December 31, 2019, the subsidiary sold $100,000 of inventory to its parent, of which $30,000 remains unpaid at December 31, 2019. Deferred profit at December 31, 2018, equaled $12,000, with all of these inventories sold to unaffiliated companies in 2019. Deferred profit at December 31, 2019, equals $22,400. The parent uses the cost method of pre-consolidation Equity Investment book-keeping. The subsidiary's retained earnings on January 1, 2019 and December 31, 2019 are $775,000 and $955,000, respectively. Calculate the amount of the [ADJ] consolidation entry to be included in the 2019 consolidation worksheet.
Assume a parent company acquired its subsidiary on January 1, 2016. On January 1, 2016, the subsidiary's retained earnings was $637,500. During the year ended December 31, 2019, the subsidiary sold $ 100,000 of inventory to its parent, of which $30,000 remains unpaid at December 31, 2019. Deferred profit at December 31, 2018, equaled $12,000, with all of these inventories sold to unaffiliated companies in 2019. Deferred profit at December 31, 2019, equals $22,400. The parent uses the cost method of pre- consolidation Equity Investment book-keeping. The subsidiary's retained earnings on January 1, 2019 and December 31, 2019 are $775,000 and $955,000, respectively. Calculate the amount of the [ADJ] consolidation entry to be included in the 2019 consolidation worksheet.
On 1/1/2021 P company acquired 90% of S company and 60% of R company. Accounts payable balance for P company is 17000 JD, and for S company 12000 JD, and for R company 8000 JD. P sold inventory to S on account for 6000 JD, S sold P on account for 3500 JD, S sold R on account for 4500 JD, R sold P on account for 1500 JD. Compute consolidated balance for accounts payable. Select one: a. 20500 b. 21500 O c. 22500 O d. 23500