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

Included in the amounts for Skillet's sales were intra-entity gross profits related to Skillet's intra-entity transfer of merchandise to Pot for $140,000.There were no intra-entity transfers from Pot to Skillet.Intra-entity transfers had the same markup as sales to outsiders.Pot still had 40% of the intra-entity gross profit remaining in ending inventory at the end of 2018.What are consolidated sales and cost of goods sold for 2018?

Yoderly Co., a wholly owned subsidiary of Nelson Corp., sold goods to Nelson near the end of 2018.The goods had cost Yoderly $105,000 and the selling price was $140,000.Nelson had not sold any of the goods by the end of the year. Required: Prepare Consolidation Entry TI and Consolidation Entry G that are required for 2018.

Assuming there are no excess amortizations or other intra-entity transactions, compute income from Stark reported on Parker's books for 2018.

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?

Polar sold a building to Icecap on January 1, 2017 for $112,000, although the book value of this asset was only $70,000 on that date.The building had a five-year remaining useful life and was to be depreciated using the straight-line method with no salvage value. Required: For the consolidated financial statements for 2018, determine the balances that would appear for the following accounts: (i) Buildings (net); (ii) Operating expenses; and (iii) Net income attributable to the noncontrolling interest.

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?

On January 1, 2018, Payton Co.sold equipment to its subsidiary, Starker Corp., for $115,000.The equipment had cost $125,000, and the balance in accumulated depreciation was $45,000.The equipment had an estimated remaining useful life of eight years and $0 salvage value.Both companies use straight-line depreciation.On their separate 2018 income statements, Payton and Starker reported depreciation expense of $84,000 and $60,000, respectively.The amount of depreciation expense on the consolidated income statement for 2018 would have been:

Compute the gain or loss relating to the land that will be reported in consolidated net income for 2019.

Assuming there are no excess amortizations or other intra-entity transactions, Compute the income from Devin reported on Pepe's books for 2018.

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

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

Prepare any 2018 consolidation worksheet entries that would be required regarding the 2017 inventory transfer.

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

Bauerly Co.owned 70% of the voting common stock of Devin Co.During 2017, Devin made frequent sales of inventory to Bauerly.There was deferred intra-entity gross profit of $40,000 in the beginning inventory and $25,000 of intra-entity gross profit at the end of the year.Devin reported net income of $137,000 for 2017.Bauerly decided to use the equity method to account for the investment.Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, what is the net income attributable to the noncontrolling interest for 2017?

Assuming there are no excess amortizations or other intra-entity transactions, compute income from Stiller on Leo's books for 2018.

In the consolidation worksheet for 2018, assuming Carter uses the initial value method of accounting for its investment in Strickland, which of the following accounts would be credited to defer recognition of intra-entity gross profit with regard to the 2017 intra-entity transfers?

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.

How does a gain on an intra-entity transfer of equipment affect the calculation of a noncontrolling interest?

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

Compute the equity in earnings of Gargiulo reported on Posito's books for 2018.