Please do not give image format and show all explanation SalesCost of Goods SoldGross ProfitSelling, General, and Administrative ExpensesDepreciation and Amortization ExpenseIncome before TaxIncome Tax Expense (at 40%)Net IncomeBanks CorporationStatement of Net IncomeFor the Year Ended December 31$Show Transcribed TextLess:$$$Banks CorporationStatement of Net IncomeFor the Year Ended December 3110,0006,7003,3007009501,650660990 The Banks Corporation sold its credit subsidiary on December 31 ofthe current year at a gain of $237. See below for the corporation'sincome statement before removing the discontinued subsidiary andbefore the inclusion of the gain on the sale of the subsidiary.(Click the icon to view the corporation's income statement beforeremoving the discontinued subsidiary and before the inclusion of thegain on the sale of the subsidiary.)Prepare Banks Corporation's statement of net income forthe current year reflecting the discontinued subsidiary,assuming that it met all of the necessary conditions to bereported as a discontinued operation. The discontinuedsubsidiary accounted for 20% of revenues and 15% of alloperating expenses (Use the condensed, multi-stepincome statement format and assume the company issubject to a 40% income tax rate. Round your answers tothe nearest cent SX XX Use parentheses or a minus sian

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Description: Please do not give image format and show all explanation SalesCost of Goods SoldGross ProfitSelling, General, and Administrative ExpensesDepreciation and Amortization ExpenseIncome before TaxIncome Tax Expense (at 40%)Net IncomeBanks CorporationState

Discontinued operations are those portions of an entity's business or processes that have been…

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Prepare Banks Corporation's statement of net income for the current year reflecting the discontinued subsidiary, assuming that it met all of the necessary conditions to be reported as a discontinued operation. The discontinued subsidiary accounted for 20% of revenues and 15% of all operating expenses, (Use the condensed, multi-step income statement format and assume the company is subject to a 40% income tax rate. Round your answers to the nearest cent SX XX Use parentheses or a minus sian

Prepare Banks Corporation's statement of net income for the current year reflecting the discontinued subsidiary, assuming that it met all of the necessary conditions to be reported as a discontinued operation. The discontinued subsidiary accounted for 20% of revenues and 15% of all operating expenses, (Use the condensed, multi-step income statement format and assume the company is subject to a 40% income tax rate. Round your answers to the nearest cent SX XX Use parentheses or a minus sian

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter6: Corporations: Redemptions And Liquidations

Section: Chapter Questions

Problem 63P

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Artichoke Co. has a subsidiary, which is accounted for in its separate financial statements using the cost method. At the end of 2032, the company reports net income of $200,000 in its separate financial statements. Cash dividends paid by subsidiary and received by the company $35,000 Increase in fair value of investment $120,000 Share in net income of subsidiary $40,000 Assuming it has no other subsidiaries and other transactions affecting the net income at a consolidated level, compute the net income of the company at a consolidate level.
Choose the correct. Dane, Inc., owns Carlton Corporation. For the current year, Dane reports net income (without consideration of its investment in Carlton) of $185,000 and the subsidiary reports $105,000. The parent had a bond payable outstanding on January 1, with a carrying amount of $209,000. The subsidiary acquired the bond on that date for $196,000. During the current year, Dane reported interest expense of $18,000 while Carlton reported interest income of $19,000, both related to the intra-entity bond payable. What is consolidated net income?a. $289,000b. $291,000c. $302,000d. $304,000
A wholly owned subsidiary declared dividend and half remains unpaid bythe end of the year, which of the following is TRUE? a. Only half of the amount of the dividend will be used to reduce the profit ofthe parent for consolidation purposes. b. The total amount of the dividend will be eliminated in the working paperelimination entry by debiting “dividend revenue” account.c. The transaction will have an impact in the computation of the balance ofNCI at the end.d. The elimination entry will include a debit to non-controlling interest for theamount of dividend received by the non-controlling shareholders.
Ocean Ltd is the parent entity to the wholly owned subsidiaries of River Ltd, Creek Ltd, and Puddle Ltd. During the year ended 30 June 2022 the following transactions occurred within Ocean Ltd group. The perpetual inventory system has been adopted by all entities in the Ocean Ltd group and the tax rate is 30% for all accounting periods. On 01 July 2021 Ocean Ltd sold an item of equipment to Creek Ltd for $850,000 cash. The original cost of the equipment was $950,000. Ocean Ltd adopted an accounting policy whereby equipment was being depreciated on a straight line basis over its useful life of 8 years. The carrying amount of the equipment in Ocean Ltd financial statements at the date of sale was $520,000. Subsequent to the transfer, Creek Ltd depreciated the equipment on a straight line basis over its remaining useful life of 3 years. Required: Fill in the missing amount for the following accounts that will appear in the consolidated adjusting journal…
It is common for a parent firm to record its investment in a subsidiary under either the cost or simple equity method to expedite the elimination process. This does create some complications, however, when all or a portion of the investment is sold. Assume that in each of the following cases, the parent sells its investment midway through its fiscal year.(1) The parent owned an 80% interest and sold all of its holdings.(2) The parent owned an 80% interest and sold a 20% interest to reduce its ownership percentage to 60%.(3) The parent owned an 80% interest and sold a 60% interest to reduce its ownership percentage to 20%.Required:a. For each of the above cases, comment on the procedures necessary to record the sale, where the investment is carried under simple equity, and the impact on consolidated income of the sale.b. For each of the above cases, state the added procedures that would be necessary if the investment was recorded under the cost method.
A subsidiary that has a net operating loss carryforward is acquired. The related deferred income tax asset is $230,000. Because the parent believes that a portion of this carryforward likely will never be used, it also recognizes a valuation allowance of $150,000. At the end of the first year of ownership, the parent reassesses the situation and determines that the valuation allowance should be reduced to $110,000. What effect does this change have on the business combination’s reporting?
On January 1, 20x6, Parent Corporation purchased 80% of Subsidiary Company's outstanding stock for P620,000. At that date, all of Subsidiary's assets and liabilities had market valu. approximately equal to their book valu. and no goodwill was includ. in the purchase price. The following information was available for 20x6: income from own operations of Parent, P150,000, operating loss of Subsidiary, P20,000. Dividends paid in 20x6 by Parent, P75,000; by Subsidiary to Parent, P12,000.1 On July 1, 20x6, there was a downstream sale of equipment at a gain of P25,000. The equipment is expected to have a remaining useful life of 10 years from the date of sale. Also, on January 1, 20x6, there was an upstream sale of furniture at a loss of P7,500. The furniture is expected to have a useful life of five years from the date of sale. Non-controlling interest is measured at fair value. How much is the consolidated net income attributable to the parent shareholders' equity?
Hobbes Corporation’s purchase of stock of Tiger Company gave Hobbes voting control over Tiger. A portion of the amount Hobbes paid reflects the fact that Tiger's inventories have a market value in excess of their book value.How should this portion of the cost be accounted for by Hobbes Corporation? Select one: a. Reported as goodwill on the balance sheet of Hobbes Corporation b. Amortized against investment revenue over the remaining useful life of the investment c. Included in the carrying value of the investment until disposition of the stock d. Added to the inventory cost on Hobbes's consolidated balance sheet
Selected information from the separate and consolidated income statements of CHAELISA LTD.and as subsidiary, JENSOO INC. for the year ended December 31, 2021 are as follows: CHAELISA LTD. JENSOOINC. ConsolidatedSales P600,000 P420,000 P924,000COGS 450,000 330,000 693,000Gross profit P150,000 P 90,000 P231,000 During 2021, CHAELISA LTD. sold goods to JENSOO INC. at the same mark-up on cost that CHAELISA LTD. uses for all sales. At December 31, 2021, JENSOO INC. had not paid all of these goods and still held 37.5% of them in inventory. Compute for the original cost of goods in JENSOO INC.’s inventory acquired from Apple.
On January 1, 2021, Parent Company acquires 80% of the equity interests of Subsidiary Company, a private entity, in exchange for cash of P1,500,000. The management of Parent initially measures the separately recognizable identifiable assets acquired and the liabilities assumed as of the acquisition date in accordance with the requirements of IFRS 3. The identifiable assets are measured at P2,500,000 and the liabilities assumed are measured at P500.000. Parent Company engages an independent consultant, who determines that the fair value of the 20% non-controlling interest in Subsidiary is P420,000. What is the amount of goodwill (gain or bargain purchase) from the business combination?
Hobbes Corporation’s purchase of stock of Tiger Company gave Hobbes voting control over Tiger. A portion of the amount Hobbes paid reflects the fact that Tiger's inventories have a market value in excess of their book value.How should this portion of the cost be accounted for by Hobbes Corporation? Select one: a. Included in the carrying value of the investment until disposition of the stock b. Amortized against investment revenue over the remaining useful life of the investment c. Reported as goodwill on the balance sheet of Hobbes Corporation d. Added to the inventory cost on Hobbes's consolidated balance sheet
Aldinga Ltd owns all the issued shares of Beach Ltd, having acquired its ownership interest on 1 August 2013. The accountant, Ms McKay, is preparing the consolidated financial statements at 30 June 2019, and, as a part of preparing the consolidation worksheet for Aldinga Ltd, is analysing the intragroup transactions between the parent and its subsidiary. Assume a tax rate of 30%. On 1 January 2018, Aldinga Ltd sold an item of machinery to Beach Ltd that Beach Ltd classified as inventory. At the date of sale, Aldinga Ltd had recorded the asset at a carrying amount of $150 000 (net of $20 000 depreciation, calculated using a 10% p.a. straight-line method). Beach Ltd recorded the asset at $160 000. Beach Ltd sold it to Oz Animals Ltd on 15 August 2019 for $100 000. Required: Ms McKay is concerned that the auditors may require her to explain the adjustments she has made. Provide suitable explanations for the transaction on 1 January 2018 above.