Exam 5: Consolidated Financial Statements Intra-Entity Asset Transactions

Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, compute Wilson's share of income from Simon for consolidation for 2017.

When is the gain on an intra-entity transfer of land recognized in consolidated net income?

In the consolidation worksheet for 2017, which of the following accounts would be credited to defer unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

Compute Parker's reported gain or loss on its internal accounting records prior to consolidation relating to the land for 2019.

Compute the gain or loss on the intra-entity transfer of land that should be reported on the books of Stiller prior to consolidation.

Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, what amount of this gain should be recognized for consolidation purposes for 2017?

On January 1, 2018, Race Corp.acquired 80% of the voting common stock of Gallow Inc.During the year, Race sold to Gallow for $450,000 goods that cost $330,000.At year-end, Gallow owned 15% of the goods transferred.Gallow reported net income of $204,000, and Race's net income was $806,000.Race decided to use the equity method to account for this investment.Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, what was the net income attributable to the noncontrolling interest?

Prepare journal entries for Virginia and Stateside to record the sales/purchases during 2017.

What is the consolidated total for inventory at December 31, 2018?

What is the consolidated total of noncontrolling interest appearing in the balance sheet?

How would consolidated cost of goods sold have differed if the inventory transfers had been for the same amount and cost, but from Stendall to Edgar?

Compute the equity in earnings of Gargiulo reported on Posito's books for 2019.

How is the gain on an intra-entity transfer of a depreciable asset recognized?

Parent sold land to its subsidiary resulting in a gain in 2016, the year of transfer.The subsidiary sold the land to an unrelated third party for a gain in 2019.Which of the following statements is true?

During 2018, Edwards Co.sold inventory to its parent company, Forsyth Corp.Forsyth still owned the entire amount of inventory purchased at the end of 2018.Why must the gross profit on the sale be deferred when consolidated financial statements are prepared at the end of 2018?

At what amount should the equipment (net of depreciation) be included in the consolidated balance sheet dated December 31, 2018?

Norek Corp.owned 70% of the voting common stock of Thelma Co.On January 2, 2017, Thelma sold a parcel of land to Norek.The land had a book value of $32,000 and was sold to Norek for $45,000.Thelma's reported net income for 2017 was $119,000.Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, what is net income attributable to the noncontrolling interest?

For each of the following situations (1 - 10), select the correct entry (A - E) that would be required on a consolidation worksheet. (A) Debit retained earnings. (B) Credit retained earnings. (C) Debit investment in subsidiary. (D) Credit investment in subsidiary. (E) None of these answer choices are correct. ___ 1. Upstream beginning intra-entity gross profit on inventory, using the initial value method of accounting. ___ 2. Downstream beginning intra-entity gross profit on inventory, using the initial value method of accounting. ___ 3. Upstream ending intra-entity gross profit on inventory, using the initial value method of accounting. ___ 4. Downstream ending intra-entity gross profit on inventory, using the initial value method of accounting. ___ 5. Upstream transfer of depreciable assets, in the period after transfer, where subsidiary recognizes a gain, using the initial value method of accounting. ___ 6. Downstream transfer of depreciable assets, in the period after transfer, where parent recognizes a gain, using the initial value method of accounting. ___ 7. Upstream transfer of land, in the period after transfer, where subsidiary recognizes a loss, using the initial value method of accounting. ___ 8. Downstream transfer of land, in the period after transfer, where parent recognizes a loss, using the initial value method of accounting. ___ 9. Eliminate income from subsidiary, recorded under the equity method of accounting. ___ 10. Eliminate recorded amortization of acquisition-date fair value over book value, recorded under the equity method of accounting.

Prince Co.owned 80% of Kile Corp.'s common stock.During October 2018, Kile sold merchandise to Prince for $140,000.At December 31, 2018, 50% of this merchandise remained in Prince's inventory.For 2018, gross profit percentages were 30% of sales for Prince and 40% of sales for Kile.The amount of intra-entity gross profit remaining in ending inventory at December 31, 2018 that should be eliminated in the consolidation process is:

Varton Corp.acquired all of the voting common stock of Caleb Co.on January 1, 2018.Varton owned some land with a book value of $84,000 that was sold to Caleb for its fair value of $120,000.How should this transfer be accounted for by the consolidated entity?