Explain why transactions between members of a consolidated firm should not be reflected in the consolidated financial statements.
Q: 2. Computer for the Net Present Value using the present value of an annuity. Get the value using…
A: Explanation of the concept Net present value method which is used for decision making for accepting…
Q: Stock Split
A: Stock split is a situation where a particular number of shares are offered for each share held of…
Q: Bentley Corporation received cash from issuing 13,000 shares of common stock at par on January 1,…
A: In the given question, the Corporation has issued 13,000 shares at par. The par value per share is $…
Q: True/False [K1 Each] Indicate whether the statement is true or false. 1. The number of payments of…
A: 1. This statement is false. As the number of interest over the duration of a compound interest =…
Q: Question. A, B, C carry on business sharing the profits in the ratio of 2/3, 1/3, 5/6 respectively.…
A: Introduction: In cases where the Partnership Act is silent, the partnership is governed by the…
Q: Sharpie is a listed firm that operates in the UK and prepares its accounts using the International…
A: Key Points: 1.If an equity investment is not kept for trade, a corporation can make an irreversible…
Q: nformation concerning a product produced by Ender Company appears here: Sales price per unit…
A: Contribution margin per unit = Selling price - variable Cost = 159 - 78 =$81
Q: Explain the purpose of the statement of cash flows
A: Cash Flow Statement - Cash Flow Statement shows the movement of cash during the financial year. This…
Q: Problem 8-6 (Reconstruction of Shown below and on the next page are account balances found in the…
A: One of the source used by the business organizations to raise the capital are issue of shares i.e.…
Q: The following information pertains to the inventory of Parvin Company for Year 3: Jan. 1 Beginning…
A: Net income is the amount of money earned by the entity after deducting the expenses from the…
Q: $231,000 during 2021. Wang applies the CECL model to account for its investment and calculates that,…
A: Current investments are the investments held for a short period of time that is., for the period of…
Q: 18. Using the information in MC 17, under accrual basis, what amount should be reported as gross…
A: Accrual basis of accounting says that all expenses incurred in the particular period shoul be…
Q: Melissa had a $200,000 long-term capital gain when she sold some of her Bitcoin in 2021, bringing…
A: When a capital asset is sold, the phrase capital gain refers to the rise in its value. Simply put, a…
Q: The declaration, record, and payment dates in connection with a cash dividend of $108,000 on a…
A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…
Q: The Chris Clapper Copper Company declared a 25 percent stock dividend on March 10 to shareholders of…
A: When a company issues stock dividend it means it issue shares as dividend instead of cash. Dividend…
Q: If an entity wishes to change from a cost model to fair value model under IAS 40 – Investment…
A: IAS 40 is one of the accounting standard that is used for investment property. Investment property…
Q: TB MC Qu. 5-63 (Algo) Manufacturing overhead: Metal Company Metal Company budgeted $564,000…
A: Calculation of cost per direct labor hour :- Direct labor hour = Machine…
Q: 25. Calculate the amount of corporate income tax due and the net income after taxes (in $) for the…
A: Tax is calculated on the net income of a entity. It is the liability payable to the government on…
Q: 25. Calculate the amount of corporate income tax due and the net income after taxes (in $) for the…
A: Net income after taxes = $10,625,500
Q: The following is the six-column worksheet of the Drilon's Delivery Services prepared with errors.…
A: Drilon's Delivery Services…
Q: Problem:1 (JOB ORDER COSTING) The Collins Company uses a job-order costing system and applies…
A: Cost accounting is one of the important branch of accounting in practice. This shows total costs…
Q: Find break-even point where a manager has determined that a potential new product can be sold at a…
A: Break even point is the situation where companies total cost will be equal to its total revenue…
Q: Apr. 30 Received $495,000 from Commerce Bank after signing a 12-month, 5 percent, promissory note.…
A: Journal entries are recorded in chronological order where transactions of business has been recorded…
Q: Archibald Corporation, a public corporation exchanged an asset with Bass Industries. The following…
A: Journal Entries on the books of Archibald Corp assuming that the exchange would have commercial…
Q: Arrow Manufacturing Co. expects to make 50,000 chairs during the year 1 accounting period. The…
A: Introduction: Manufacturing costs include all resources utilized in the creation of the product.…
Q: Mead Incorporated began operations in Year 1. Following is a series of transactions and events…
A: calculation of above requirement areas follows
Q: At the start of 2020 , XYZ Company Developed the following budgeted total cost function i.e $12.50X…
A: A flexible budget variance is any distinction between the results generated by a flexible budget…
Q: Prepare the correct worksheet (Excel) and the Balance Sheet of the Drilon's Delivery Services. ring…
A: Worksheet means the statement in which all account having debit or credit balance are shown up. In…
Q: Sales Contribution margin Total direct fixed costs Total operating assets Jan. 1, 2022 $1248000…
A: Formula used: ROI = Net profit / Average Operating Assets. Division of Average operating assets with…
Q: ■ Exercise 2-28 Cost Classifications (LO 2-2,2-8, 2-9) Consider the following costs that were…
A: Fixed cost refers to those cost which doesn't changes with the changing level of production or sales…
Q: On Jan 2, 20X1, ABC acquired 20% of the 400,000 ordinary shares of Yellow Co at P30 per share. The…
A: Investment: Investment is the act of acquiring shares of another company by one company. The company…
Q: ABC, DEF and GHI formed a partnership on April 1, 2022 and contributed P300,000, P200,000 and…
A: In Partnership profit is divided between partners by preparing profit and loss appropriation…
Q: Which of the following are the ways that a company can finance the purchase of assets? Equity…
A: the correct option with proper explanation are as follows
Q: Transactions involved in the purchases and cash disbursements cycle include: A Debit inventory,…
A: Purchases and disbursements cycle is one of the important cycle used in accounting information…
Q: On January 1, Year 1, Pearson Moving Company paid $41187 cash to purchase a truck. The truck was…
A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…
Q: Identify three (3) limitations of Generally Accepted Accounting Principles (GAAP), for security…
A: Generally Accepted Accounting Principles (GAAP): GAAP, which stands for generally accepted…
Q: The intangible assets section of Sheffield Company at December 31, 2022, is presented here. Patents…
A: Amortization - The cost of an intangible asset is written down over its usable or legal life,…
Q: The Tucker family has health insurance coverage that pays 65 percent of out-of-hospital expenses…
A: T lives in the United States with his family. He has purchased family health insurance.…
Q: Stockholders' Equity Prepare the Paid-In Capital portion of the stockholders' equity section of the…
A: Paid in capital section of stockholders equity does not include retained earnings
Q: One of our client companies, EA Community Laundry Chain, asked us for a consultation on their…
A: 1. Income Statement 2. Balance Sheet The first statement shows the income earned and loss incurred…
Q: 57,000 units per year at a price of RM82. What is the highest variable cost that will allow the firm…
A: RM 79.63 is the highest variable cost that will allow the firm to at least break even on this…
Q: 2021 APRIL 1 The business, JHARA DISTRIBUTORS, was registered as a single proprietorship, Jonathan…
A: Ledgers - After recording transactions in the journal next step is to transfer them into ledgers.…
Q: An entity has 20% investment in ordinary shares and 25% investment in preference shares over the…
A: Dividend Income: Returns, in the form of dividends, are delivered to shareholders from the earnings…
Q: Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct…
A: The benchmark is established ahead of time, and actual performance is tested against it. Management…
Q: If one tax is not eligible for the health insurance premium tax credit because of
A: Tax is the charge which is charged on the taxable income of a taxpayer and each taxpayer wants to…
Q: A, B, C carry on business sharing the profits in the ratio of 2/3, 1/3, 5/6 respectively. Capitals…
A: Introduction: The sort of business organization in which two or more people have agreed to work…
Q: At the end of an accounting period, a company's liabilities equaled $295,000, and owner's equity…
A: Introduction: The connection between a company's assets, liabilities, and capital is referred to as…
Q: Credit Corp Ltd. purchases a building on July 1, 2019, for $500,000. The building is expected to…
A: Journal Entries in Books of Credit Corps Ltd Transaction Date Particulars Debit $ Credit $ On…
Q: XYZ Ltd acquires 100 per cent of Red-X Ltd on 1 July 2021. XYZ Ltd pays the shareholders of Red-X…
A: Goodwill is the asset which is intangible in nature and can be computed by deducting the net asset…
Q: In 2021, Lance will get money from the following sources: Deposit Certificate (CD) Savings Bonds…
A: Schedule B of Form 1040 is filled in to report the Interest Income and Ordinary dividend. All…
Explain why transactions between members of a consolidated firm should not be reflected in the consolidated financial statements.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Which of the following is the best theoretical justification for consolidated financial statements?a. In form the companies are one entity; in substance they are separate.b. In form the companies are separate; in substance they are one entity.c. In form and substance the companies are one entity.d. In form and substance the companies are separate. (AICPA)Choose the correct. Which of the following is the best theoretical justification for consolidated financial statements?a. In form the companies are one entity; in substance they are separate.b. In form the companies are separate; in substance they are one entity.c. In form and substance the companies are one entity.d. In form and substance the companies are separate. (AICPA)Describe the process of consolidating financial statements for a parent company and its subsidiaries, including the elimination of intercompany transactions and balances.
- Which of the following statements regarding IFRS consolidated financial statements is/are correct: (i) An entity that has equity investments in one or more other entities is required to present consolidated financial statements (ii) A parent whose debt or equity instruments are not traded in a public market is not required to present consolidated financial statements (iii) Consolidated financial statements present the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries as those of a single economic entity1.Describe how the consolidated process tends to disguise information needed to analyze the financial operations of a diversified companyConsolidated financial statements are required in which ofthe following situations?a. Only when a company can exert significant influenceover another company.b. Only when a company has a passive investment inanother company.c. Only when a parent company can exercise control overits subsidiary.d. None of the above.
- The following independent statements may be true or false. Discuss the circumstances whereby the statement is true and the circumstances whereby it is false. Dividends declared by a Group (which is shown as an appropriation in the Consolidated Statement of Changes in Equity) comprises dividends declared by the Parent and dividends declared by a Subsidiary to its Non-controlling Interests.Consolidated financial statements are typically prepared when one company has A. a substantial equity interest in the net assets of another company. B. the controlling financial interest in another company. C. significant influence over the operating and financial policies of another company. D. accounted for its investment in another company by the equity method.Which of the following accounting treatments for costs related to business combination is incorrect? Group of answer choices The costs related to issuance of financial liability at fair value through profit or loss shall be recognized as expense while those related to issuance of financial liability at amortized cost shall be recognized as deduction from the book value of financial liability or treated as discount on financial liability to be amortized using effective interest method. The costs related to issuance of stock or equity securities shall be deducted/debited from any share premium from the issue and any excess is charged to “share issuance cost” reported as contract-equity account against either (1) share premium from other share issuances or (2) retained earnings Acquisition related costs such as finder’s fees; advisory, legal, accounting, valuation and other professional and consulting fees; and general administrative costs, including the costs of maintain an…
- Which of the following statements is incorrect concerning the preparation of consolidated financial statements? * A. Consolidated financial statem ents shall be prepared using uniform accounting policies for like transactions and other events in similar circumstances. b. The financial statements of the parent and its subsidiaries shall be consolidated on a line by line basis by adding together like items of assets, liabilities, equity, income and expenses. c. Intragroup balances, transactions, income and expenses shall be eliminated in full. d. When the reporting dates of the parent and a subsidiary are different, the difference shall be no more than six months.Which of the following is NOT a required disclosure for any entity that holds an interest in a VIE? a.The significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement in a VIE b.How the entity's involvement involvement with the VIE is perceived by Wall Street analysts c.The nature of restrictions on a consolidated VIE’s assets and on the settlement of its liabilities reported by an enterprise in its statement of financial position, including the carrying amounts of such assets and liabilities. d. The nature of, and changes in, the risks associated with an enterprise’s involvement with the vieWhich of the following are considered separate financial statements? a. Those presented by a parent in addition to the consolidated financial statements, in compliance with a regulatory requirement. b. Those presented by an entity, which does not have a subsidiary or associate and is not a venturer in jointly controlled entity. c. Those presented by an entity which does not have any equity interest in another entity. d. Financial statements of an entity that applies the equity method.
