ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Question
Chapter 6, Problem 6.1.1E
To determine
Intercompany transactions:
Consolidated financial statements are prepared by a parent company to consolidate the assets and liabilities of the parent and its subsidiaries. There may be some transactions between these companies which are called intercompany transactions.
To choose: The correct option.
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Students have asked these similar questions
What should the adjustment for consolidated entry be when a Subsidiary sold inventory to Parent at a lower cost. Example: S bought inventory at a cost of 300. S sold to P at 200.
Senior Inc. owns 85 percent of Junior Inc. During 20X8, Senior sold goods with a 25 percent gross profit to Junior. Junior sold all of these goods in 20X8. How should 20X8 consolidated income statement items be adjusted?
Group of answer choices
No Adjustment is necessary
Sales, Costs of Goods Sold and Inventory should be adjusted
Net Income should be adjusted
Sales and Cost of Good Sold should be adjusted
Selected information from the separate and consolidated statements of
financial position and statements of comprehensive income of Pau de
Arco, Inc. and its subsidiary, Kati Alis Co., as of December 31, 20X9, and
for the year then ended is as follows: (see image below) In Pau de Arco's
December 31, 20X9, consolidated Statement of financial position, the
carrying amount of the inventory that Kati Alis purchased from Pau de
Arco.
Pau de Arco
Kati Alis
Consolidated
Statement of financial position accounts
Accounts receivable.
P 26,000
P19,000
P 42,000
Inventory.........
25,000
50,000
30,000
67,000
Investment in Kati Alis.
Goodwill......
30,000
Noncontrolling interest........
10,000
Stockholders' equity........
154,000
50.000
154,000
Statement of comprehensive income accounts
Revenues............
P200,000
P140,000
P300,000
Cost of goods sold...
150,000
110,000
225.000
Gross profit.................
50,000
30,000
75,000
P9,000
Equity in earnings of Kati Alis.
Net income.........
P36,000…
Chapter 6 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 6 - Why must inventory transfers to related companies...Ch. 6 - Why is there a need for a consolidation entry when...Ch. 6 - Prob. 6.3QCh. 6 - How do unrealized intercompany profits on a...Ch. 6 - How do unrealized intercompany profits on an...Ch. 6 - Prob. 6.6QCh. 6 - Prob. 6.9QCh. 6 - Prob. 6.10QCh. 6 - How is the amount of consolidated retained...Ch. 6 - How will the elimination of unrealized...
Ch. 6 - Prob. 6.14QCh. 6 - Is an inventory sale from one subsidiary to...Ch. 6 - Prob. 6.16QCh. 6 - Prob. 6.1.1ECh. 6 - Prob. 6.1.2ECh. 6 - MultipleChoice Questions on Intercompany Inventory...Ch. 6 - MultipleChoice Questions on Intercompany Inventory...Ch. 6 - Prob. 6.1.5ECh. 6 - Prob. 6.1.6ECh. 6 - Prob. 6.3.1ECh. 6 - Prob. 6.3.2ECh. 6 - Prob. 6.3.3ECh. 6 - Prob. 6.4.1ECh. 6 - Prob. 6.4.2ECh. 6 - Prob. 6.4.3ECh. 6 - Prob. 6.4.4ECh. 6 - Prob. 6.5.1ECh. 6 - Prob. 6.5.2ECh. 6 - Prob. 6.5.3E
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