ADVANCED ACCOUNTING-EBOOK ACCESS
14th Edition
ISBN: 9781264157068
Author: Hoyle
Publisher: MCG
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Chapter 5, Problem 6P
To determine
Introduction: To account for related companies as a single entity all the effects of intercompany sales and purchases are eliminated. Total recorded inter-entity sales are deleted regardless of whether it is from parent to subsidiary or from subsidiary to parent.
The consolidated cost of goods sold.
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Alpha Company owns 80 percent of the voting stock of Beta Company. Alpha and Beta reported the following account information from their year-end separate financial records:
Alpha Beta
Inventory $95,000 $88,000
Sales Revenue 800,000 300,000
Cost of Goods Sold 600,000 180,000
During the current year, Alpha sold inventory to Beta for $100,000. As of year end, Beta had resold only 60 percent of these intra-entity purchases. Alpha sells inventory to Beta at the same markup it uses for all of its customers.
What is the total for consolidated sales revenue?
Luffman Inc. owns 30% of Bruce Inc. and appropriately applies the equity method. During the current year, Bruce bought inventory
costing $52,000 and then sold it to Luffman for $80,000. At year-end, all of the merchandise had been sold by Luffman to other
customers. What amount of gross profit on intra-entity sales must be deferred by Luffman?
Use this problem to answer the next three questions: On January 2, year 1, ABC Company purchased 75% of XYZ's outstanding common stock. On that date, the fair value of the 25% noncontrolling interest was $35,000. During year 1, XYZ had net income of $20,000. Selected balance sheet data at December 31, year 1, is as follows: ABC (Column 1), XYZ (Column 2) During year 1, ABC and XYZ paid cash dividends of $25,000 and $5,000, respectively, to their shareholders. There were no other intercompany transactions. In its December 31, year 1 consolidated statement of retained earnings, what amount should ABC report as dividends paid?
Chapter 5 Solutions
ADVANCED ACCOUNTING-EBOOK ACCESS
Ch. 5 - Prob. 1QCh. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - James, Inc., sells inventory to Matthews Company,...Ch. 5 - Prob. 6QCh. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - Prob. 10Q
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - Prob. 6PCh. 5 - Prob. 8PCh. 5 - Prob. 11PCh. 5 - What is the total of consolidated cost of goods...Ch. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - Prob. 15PCh. 5 - What is the consolidated total for inventory at...
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