ADVANCED ACCT.,SEL.CH.-W/ACCESS>CUSTOM<
14th Edition
ISBN: 9781307566574
Author: Hoyle
Publisher: MCG
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Chapter 7, Problem 7P
To determine
Identify the appropriate answer for the given statement from the given choices.
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Choose the correct.Diamond Company owns 80 percent of Emerald and Emerald owns 90 percent of Sapphire, Inc. Separate operating income totals for the current year follow; they contain no investment income. None of these acquisitions required amortization expense. Included in Sapphire’s income is a $50,000 intra-entity gain on transfers to Emerald still in Emerald’s possession.
Diamond
Emerald
Sapphire
Separate operating income
$348000
$228000
$21000
What is Diamond’s accrual-based net income for the year?a. $658,400b. $674,400c. $666,800d. $645,600
Diamond Company owns 80 percent of Emerald and Emerald owns 90 percent of Sapphire, Inc. Separate operating income totals for the current year follow; they contain no investment income. None of these acquisitions required amortization expense. Included in Sapphire's income is a $36,000 intra-entity gain on transfers to Emerald still in Emerald's possession.
Diamond
Emerald
Sapphire
Separate operating income
$397,000
$270,000
$230,000
What is Diamond's accrual-based net income for the year?
Positive ltd acquired an 80% stake in Strong Ltd in 20x1. During the year 20x2, the following inter-company transactions took place.
• Positive extended a loan of $200,000 to Strong on 1 April 20x2 with an interest rate of 4% per annum. Interest for the year ended 31 December 20x2 had not been paid but were recorded in the books of both companies appropriately.• Strong sold some inventory to Positive for $80,000 at a margin of 5%. Half of these goods were still unsold at the end of the year. As at 31 December 20x2, Positive’s records showed that it owed Strong $20,000 but the latter’s financial statements indicated a receivable of $30,000. The difference had been attributed to a payment made by Positive that was still being processed by the bank.
Required: Prepare the consolidation journal entries for the elimination of the above inter-company transactions for the year ended 31 December 20x2.
Chapter 7 Solutions
ADVANCED ACCT.,SEL.CH.-W/ACCESS>CUSTOM<
Ch. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - Prob. 3QCh. 7 - How does the presence of an indirect ownership...Ch. 7 - Prob. 5QCh. 7 - In accounting for mutual ownerships, what is the...Ch. 7 - Prob. 7QCh. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - Prob. 10Q
Ch. 7 - Prob. 11QCh. 7 - Jones acquires Wilson, in part because the new...Ch. 7 - Prob. 13QCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Which of the following is correct for two...Ch. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Prob. 9PCh. 7 - Prob. 10PCh. 7 - Prob. 11PCh. 7 - Prob. 13PCh. 7 - Prob. 14PCh. 7 - Prob. 15PCh. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Prob. 19PCh. 7 - Prob. 20PCh. 7 - Prob. 23PCh. 7 - Prob. 24PCh. 7 - Prob. 26P
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