Hodge Co. owns 90 percent of the voting common shares of Bison Co. During 2022, Hodge had sales of $112 milion and cost of goods sold of $84OK. Additionally, in 2022, Bison record sales of $420K and cost of goods sold of $252K. In the amounts report for Bison's sales were intra-entity gross profits related to Bison's intra-entity transfer of merchandise to Hodge for $140K. (Note: there were no intra-entity transfers from Hodge to Bison) Intra-entity transfers had the same markup as sales to outsiders. At the end of 2022, Hodge stal had 40 percent of the Intra-entity gross profit remaining in ending Inventory. What are consolidated sales and cost of goods sold for 2022? Multiple Choice $1.54M sales and $1078M COGS $1.4M sales and S052K COGS. S1AM sales and S6K CoGs. $1.4M sales and 5974.4K COGS $154M sales and $1092M COGS
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- On January 1, 2018, Alamar Corporation acquired a 42 percent interest in Burks, Inc., for $185,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $337,000. During 2018, Burks reported net income of $84,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $29,000 to Burks during 2018 for $41,000. Burks used all of this merchandise in its operations during 2018. Prepare all of Alamar's 2018 journal entries to apply the equity method to this investment....... For this example what/how do you determine the Dividend Recievable amount?On January 1, 2024, Alamar Corporation acquired a 40 percent interest in Burks, Incorporated, for $210,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $360,000. During 2024, Burks reported net income of $80,000 and declared and paid cash dividends of $25,000. Alamar sold inventory costing $30,000 to Burks during 2024 for $40,000. Burks used all of this merchandise in its operations during 2024. Required: Prepare all of Alamar's 2024 journal entries to apply the equity method to this investment. Record the acquisition of a 40 percent interest in Burks. Record the accrual of 40 percent of the reported earnings of the investee. Record the investee dividend declaration Record the collection of dividend from investee. Record the income on intra-entity sale.On January 1, 2021, Alamar Corporation acquired a 36 percent interest in Burks, Inc., for $218,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $349,000. During 2021, Burks reported net income of $76,000 and declared and paid cash dividends of $25,000. Alamar sold inventory costing $25,000 to Burks during 2021 for $36,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar’s 2021 journal entries to apply the equity method to this investment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. Record the acquisition of a 36 percent interest in Burks. 1b. Record the 36 percent income earned by Alamar from this investment. 1c. Record the investee dividend declaration. 1d. Record the collection of dividend from investee.
- On January 1, 2021, Alamar Corporation acquired a 36 percent interest in Burks, Inc., for $198,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $353,000. During 2021, Burks reported net income of $84,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $27,000 to Burks during 2021 for $35,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar’s 2021 journal entries to apply the equity method to this investment 1. Record the acquisition of a 36 percent interest in BurksOn January 1, 2021, Alamar Corporation acquired a 42 percent interest in Burks, Inc., for $185,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $337,000. During 2021, Burks reported net income of $84,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $29,000 to Burks during 2021 for $41,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar’s 2021 journal entries to apply the equity method to this investment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)JEM owns 30% of MOCK's share capital. During the year to 31 December 2011, MOCK sold inventories at transfer price of $2,000,000 to JEM, of which 40% were still held in inventory of JEM at the year end. MOCK applies a mark-up of 25% on all goods sold. MOCK reported a net profit of $500,000 for year ended 31 December 2011. MOCK is JEM's only associate. What is share of associate's net profit after tax in JEM's consolidated profit or loss statement for year ended 31 December 2011? PLEASE PROVIDE EXPLAINTION. A) $150,000 B) $102,000 C) $38,000 D) $97,000 E) None of the above.
- Matthew, Inc., owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee’s operations and decision making. On January 1, 2021, the balance in the Investment in Lindman account is $398,000. Amortization associated with this acquisition is $17,700 per year. In 2021, Lindman earns an income of $206,000 and declares cash dividends of $51,500. Previously, in 2020, Lindman had sold inventory costing $32,900 to Matthew for $47,000. Matthew consumed all but 20 percent of this merchandise during 2020 and used the rest during 2021. Lindman sold additional inventory costing $46,200 to Matthew for $70,000 in 2021. Matthew did not consume 40 percent of these 2021 purchases from Lindman until 2022. What amount of equity method income would Matthew recognize in 2021 from its ownership interest in Lindman? What is the equity method balance in the Investment in Lindman account at the end of 2021?On July 1, 2024, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $104 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At the date of acquisition of the stock, VB’s net assets had a total fair value of $366 million and a book value of $224 million. Of the $142 million difference, $24 million was attributable to the appreciated value of inventory that was sold during the last half of 2024, $80 million was attributable to buildings that had a remaining depreciable life of 10 years, and $38 million related to equipment that had a remaining depreciable life of five years. Between July 1, 2024, and December 31, 2024, VB earned net income of $32 million and declared and paid cash dividends of $26 million. Required: Prepare all appropriate journal entries related to the investment during 2024, assuming Gupta accounts for this investment by the equity method. Determine the amounts to be reported by Gupta.ABC owns 30% of MELY, which it purchased on 1 January 20X7 for $5,000,000. At that date, MELY had retained earnings of $10,600,000. At the year end date of 31 December 20X1, MELY had retained earnings of $12,800,000 after paying out a dividend of $2,000,000. On 30 November 20X1, ABC sold $1,400,000 original cost of goods to MELY, on which it made 30% profit. MELY had resold none of these goods by 31 December 20X1. ABC equity accounted its only associate MELY. The "investment in associate" in ABC consolidated statement of financial position as at 31 December 20x1 will report: (PLEASE EXPLAIN THE ANSWER) A) $5,660,000 B) $4,934,000 C) $5,534,000 D) $5,240,000 E) None of the above
- On July 1, 2021, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $135 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At the date of acquisition of the stock, VB’s net assets had a total fair value of $440 million and a book value of $240 million. Of the $200 million difference, $28 million was attributable to the appreciated value of inventory that was sold during the last half of 2021, $132 million was attributable to buildings that had a remaining depreciable life of 15 years, and $40 million related to equipment that had a remaining depreciable life of 10 years. Between July 1, 2021, and December 31, 2021, VB earned net income of $36 million and declared and paid cash dividends of $28 million. Required:1. Prepare all appropriate journal entries related to the investment during 2021, assuming Gupta accounts for this investment by the equity method.2. Determine the amounts to be reported by Gupta.…Pader Inc. acquired 75% of Mader Inc. ordinary shares. During 2020, Pader Inc. produced 200,000 balls at a cost of P79 each and sol 140,000 balls to Mader Inc. for P90 each. Mader Inc. sold 72,000 balls to unrelated parties for P117 each prior to December 31, 2020 and sold the remaining in early 2021 for P130 each. Both entities use perpetual inventory system. What amount of cost of goods sold should be reported in the consolidated income statement in 2020?* a. P 11,060,000 b. P 11,852,000 c. P 5,688,000 d. P 6,480,000On July 1, 2021, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $110 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At the date of acquisition of the stock, VB’s net assets had a total fair value of $360 million and a book value of $240 million. Of the $120 million difference, $22 million was attributable to the appreciated value of inventory that was sold during the last half of 2021, $84 million was attributable to buildings that had a remaining depreciable life of 15 years, and $14 million related to equipment that had a remaining depreciable life of 5 years. Between July 1, 2021, and December 31, 2021, VB earned net income of $24 million and declared and paid cash dividends of $16 million. Required:1. Prepare all appropriate journal entries related to the investment during 2021, assuming Gupta accounts for this investment by the equity method.2. Determine the amounts to be reported by Gupta.