Exam 5: Consolidated Financial Statements Intra-Entity Asset Transactions

For consolidation purposes, what net debit or credit will be made for the year 2017 relating to the accumulated depreciation for the equipment transfer?

Gentry Inc.acquired 100% of Gaspard Farms on January 5, 2017.During 2017, Gentry sold Gaspard Farms $625,000 of goods, which had cost $425,000.Gaspard Farms still owned 12% of the goods at the end of the year.In 2018, Gentry sold goods with a cost of $800,000 to Gaspard Farms for $1,000,000, and Gaspard Farms still owned 10% of the goods at year-end.For 2018, the cost of goods sold totaled $5,400,000 for Gentry, and $1,200,000 for Gaspard Farms.What was consolidated cost of goods sold for 2018?

For consolidation purposes, what amount would be debited to cost of goods sold for the 2019 consolidation worksheet with regard to the unrecognized intra-entity gross profit remaining in ending inventory with respect to the 2019 intra-entity transfer of merchandise?

What is the consolidated total for equipment (net) at December 31, 2018?

Compute the amortization of gain through a depreciation adjustment for 2019 for consolidation purposes.

Flintstone Inc.acquired all of Rubble Co.on January 1, 2018.Flintstone decided to use the initial value method to account for this investment.During 2018, Flintstone sold to Rubble for $600,000 inventory with a cost of $500,000.At the end of the year 30% of the goods were still in Rubble's inventory. Required: Prepare Consolidation Entry TI for the intra-entity transfer and Consolidation Entry G for the ending inventory adjustment necessary for the consolidation worksheet at 12/31/20.

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 2019.

Which of the following will be included in a consolidation entry for 2017?

In the consolidation worksheet for 2018, which of the following accounts would be credited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

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

Which of the following statements is true regarding an intra-entity transfer of land?

Compute the amortization of gain through a depreciation adjustment for 2017 for consolidation purposes.

Fraker, Inc.owns 90 percent of Richards, Inc.and bought $200,000 of Richards' inventory in 2018.The transfer profit was equal to 30 percent of the sales price.When preparing consolidated financial statements, what amount of these sales is eliminated?

In the consolidation worksheet for 2017, which of the following accounts would be debited to eliminate the intra-entity transfer of inventory?

McGraw Corp.owned all of the voting common stock of both Ritter Co.and Lawler Co.During 2018, Ritter sold inventory to Lawler.The goods had cost Ritter $65,000, and they were sold to Lawler for $100,000.At the end of 2018, Lawler still held 30% of the inventory. Required: How should the sale between Lawler and Ritter be accounted for in a 2018 consolidation worksheet? Show worksheet entries to support your answer.

Chain Co.owned all of the voting common stock of Shannon Corp.The corporations' balance sheets dated December 31, 2017, include the following balances for land: for Chain--$416,000, and for Shannon--$256,000.On the original date of acquisition, the book value of Shannon's land was equal to its fair value.On April 4, 2018, Chain sold to Shannon a parcel of land with a book value of $65,000.The selling price was $83,000.There were no other transfers, which affected the companies' land accounts during 2017.What is the consolidated balance for land on the 2018 balance sheet?

What is the net effect on net income as a result of consolidating adjustments made in 2017 with respect to the equipment transfer?

During 2017, Von Co.sold inventory to its wholly-owned subsidiary, Lord Co.The inventory cost $30,000 and was sold to Lord for $44,000.For consolidation reporting purposes, when is the $14,000 intra-entity gross profit recognized?

What is the purpose of the adjustments to depreciation expense within the consolidation process when there has been an intra-entity transfer of a depreciable asset?

Why do intra-entity transfers between the component companies of a business combination occur so frequently?