Exam 5: A: Consolidated Financial Statements Intra-Entity Asset Transactions

What amount of gain should be reported by Smeder Company relating to the equipment for 2017 prior to making consolidating entries?

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

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

An intra-entity transfer of a depreciable asset took place whereby the transfer price exceeded the book value of the asset.Which statement is true with respect to the year following the year in which the transfer occurred?

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

Assuming there are no excess amortizations or other intra-entity transactions, compute income from Stiller on Leo's books for 2017.

On November 8, 2018, Power Corp.sold land to Wood Co., its wholly owned subsidiary.The land cost $61,500 and was sold to Wood for $89,000.For consolidated financial statement reporting purposes, when must the gain on the sale of the land be recognized?

On a consolidation worksheet, what adjustment would be made for 2017 regarding the land transfer?

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?

Tara Company owns 80 percent of the common stock of Stodd Inc.In the current year, Tara reports sales of $5,000,000 and cost of goods sold of $3,500,000.For the same period, Stodd has sales of $500,000 and cost of goods sold of $400,000.During the year, Stodd sold merchandise to Tara for $40,000 at a price based on the normal markup.At the end of the year, Tara still possesses 20 percent of this inventory.Prepare the consolidation entry to defer intra-entity gross profit.

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

King Corp.owns 85% of James Co.King uses the equity method to account for its investments.During 2018, King sells inventory to James for $500,000.The inventory originally cost King $420,000.At 12/31/2018, 25% of the goods were still in James' inventory. Required: Prepare the Consolidation Entry TI and Consolidation Entry G for the consolidation worksheet.

Compute the equity in earnings of Gargiulo reported on Posito's books for 2017.

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

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

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.

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?

Assuming there are no excess amortizations or other intra-entity transactions, Compute the net income attributable to the noncontrolling interest of Devin for 2017.

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

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