Intercompany sales: An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method. Requirement 1 Amount paid by P to S on sale of building.

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Answer 1

Question

Chapter 7, Problem 7.27P

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 1

Amount paid by P to S on sale of building.

b.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 2

The amount accumulated depreciation did S reports on January 1 20X7.

c.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 3

Amount of annual depreciation S recorded prior to sale.

d.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 4

The residual value of building

e.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 5

Amount of depreciation expense did P record in 20X7.

f.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 6

The income assigned to non-controlling interest when net income is $80,000.

g.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 7

The income assigned to non-controlling interest when net income is $65,000.

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Prophet Corporation acquired 75 percent of Seer Corporation's voting common stock on December 31, 20X4, for $390,000. At the date of combination, Seer reported the following: Assets Current Assets Long-Term Assets (net) Total $ 220,000 420,000 view transaction list $ 640,000 Consolidation Worksheet Entries Liabilities Current Liabilities. Long-Term Liabilities. Common Stock Retained Earnings Total At December 31, 20X4, the book values of Seer's net assets and liabilities approximated their fair values, except for buildings, which had a fair value of $80,000 more than book value, and inventories, which had a fair value of $36,000 more than book value. The fair value of the noncontrolling interest was determined to be $130,000 at that date. $ 80,000 200,000 120,000 240,000 $ 640,000 Required: Prophet Corporation wishes to prepare a consolidated balance sheet immediately following the business combination. Prepare the consolidation entry or entries needed to prepare a consolidated balance…

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Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At the date of acquisition, the fair value of the noncontrolling interest was equal to 25 percent of Saul’s book value. The balance sheets of the two companies for January 1, 20X1, are as follows: On January 2, 20X1, Penny purchased an additional 2,500 shares of common stock directly from Saul for $150,000. Required:a. Prepare the consolidation entry needed to complete a consolidated balance sheet worksheet immediately following the issuance of additional shares to Penny. b. Prepare a consolidated balance sheet worksheet immediately following the issuance of additional shares to Penny.

Answer 2

Question

Chapter 7, Problem 7.27P

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 1

Amount paid by P to S on sale of building.

b.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 2

The amount accumulated depreciation did S reports on January 1 20X7.

c.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 3

Amount of annual depreciation S recorded prior to sale.

d.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 4

The residual value of building

e.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 5

Amount of depreciation expense did P record in 20X7.

f.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 6

The income assigned to non-controlling interest when net income is $80,000.

g.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 7

The income assigned to non-controlling interest when net income is $65,000.

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Answer 3

Question

Chapter 7, Problem 7.27P

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 1

Amount paid by P to S on sale of building.

b.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 2

The amount accumulated depreciation did S reports on January 1 20X7.

c.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 3

Amount of annual depreciation S recorded prior to sale.

d.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 4

The residual value of building

e.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 5

Amount of depreciation expense did P record in 20X7.

f.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 6

The income assigned to non-controlling interest when net income is $80,000.

g.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 7

The income assigned to non-controlling interest when net income is $65,000.

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Answer 4

Question

Chapter 7, Problem 7.27P

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 1

Amount paid by P to S on sale of building.

b.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 2

The amount accumulated depreciation did S reports on January 1 20X7.

c.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 3

Amount of annual depreciation S recorded prior to sale.

d.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 4

The residual value of building

e.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 5

Amount of depreciation expense did P record in 20X7.

f.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 6

The income assigned to non-controlling interest when net income is $80,000.

g.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 7

The income assigned to non-controlling interest when net income is $65,000.

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Answer 5

Chapter 7, Problem 7.27P

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 1

Amount paid by P to S on sale of building.

b.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 2

The amount accumulated depreciation did S reports on January 1 20X7.

c.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 3

Amount of annual depreciation S recorded prior to sale.

d.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 4

The residual value of building

e.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 5

Amount of depreciation expense did P record in 20X7.

f.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 6

The income assigned to non-controlling interest when net income is $80,000.

g.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 7

The income assigned to non-controlling interest when net income is $65,000.

Answer 6

Chapter 7, Problem 7.27P

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 1

Amount paid by P to S on sale of building.

Answer 7

Chapter 7, Problem 7.27P

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 1

Amount paid by P to S on sale of building.

Answer 8

b.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 2

The amount accumulated depreciation did S reports on January 1 20X7.

Answer 9

b.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 2

The amount accumulated depreciation did S reports on January 1 20X7.

Answer 10

c.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 3

Amount of annual depreciation S recorded prior to sale.

Answer 11

c.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 3

Amount of annual depreciation S recorded prior to sale.

Answer 12

d.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 4

The residual value of building

Answer 13

d.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 4

The residual value of building

Answer 14

e.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 5

Amount of depreciation expense did P record in 20X7.

Answer 15

e.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 5

Amount of depreciation expense did P record in 20X7.

Answer 16

f.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 6

The income assigned to non-controlling interest when net income is $80,000.

Answer 17

f.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 6

The income assigned to non-controlling interest when net income is $80,000.

Answer 18

g.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 7

The income assigned to non-controlling interest when net income is $65,000.

Answer 19

g.

To determine

Intercompany sales:An intercompany sales normally is recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss. The unrealized profit on intercompany sales are omitted under the modified equity method.

Requirement 7

The income assigned to non-controlling interest when net income is $65,000.

Answer 20

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Answer 21

Expert Solution & Answer

Answer 22

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Answer 23

Ch. 7 - Prob. 7.1Q Ch. 7 - Prob. 7.2Q Ch. 7 - Prob. 7.3Q Ch. 7 - Prob. 7.4Q Ch. 7 - Prob. 7.5Q Ch. 7 - Prob. 7.6Q Ch. 7 - Prob. 7.7Q Ch. 7 - Prob. 7.8Q Ch. 7 - Prob. 7.9Q Ch. 7 - Prob. 7.10Q

Solution Summary: The author explains that intercompany sales are recorded on the books of the selling affiliate in the same manner as any other sales, including recording of profit or loss.

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Chapter 7 Solutions