Question 1

Compute the amortization of gain through a depreciation adjustment for 2018 for consolidation purposes.

Accepted Answer

A)  $1,950. 
B)  $1,825. 
C)  $2,000. 
D)  $1,500. 
E)  $7,000. 
A)  $1,950. 
B)  $1,825. 
C)  $2,000. 
D)  $1,500. 
E)  $7,000.

Question 2

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?

Accepted Answer

A)  $6,600,000. 
B)  $6,604,000. 
C)  $5,620,000. 
D)  $5,596,000. 
E)  $5,625,000. 
A)  $6,600,000. 
B)  $6,604,000. 
C)  $5,620,000. 
D)  $5,596,000. 
E)  $5,625,000.

Question 3

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

Accepted Answer

A)  Retained earnings. 
B)  Cost of goods sold. 
C)  Inventory. 
D)  Investment in Fisher Company. 
E)  Sales. 
A)  Retained earnings. 
B)  Cost of goods sold. 
C)  Inventory. 
D)  Investment in Fisher Company. 
E)  Sales.

Question 4

On a consolidation worksheet, having used the equity method, what adjustment would be made for 2018 regarding the land transfer?

Accepted Answer

A)  Debit retained earnings for $15,000. 
B)  Credit retained earnings for $15,000. 
C)  Debit retained earnings for $50,000. 
D)  Credit retained earnings for $50,000. 
E)  Debit investment in Stiller for $15,000. 
A)  Debit retained earnings for $15,000. 
B)  Credit retained earnings for $15,000. 
C)  Debit retained earnings for $50,000. 
D)  Credit retained earnings for $50,000. 
E)  Debit investment in Stiller for $15,000.

Question 5

Yukon Co.acquired 75% percent of the voting common stock of Ontario Corp.on January 1, 2018.During the year, Yukon made sales of inventory to Ontario.The inventory cost Yukon $260,000 and was sold to Ontario for $390,000.Ontario held $60,000 of the goods in its inventory at the end of the year.The amount of intra-entity gross profit for which recognition is deferred, and should therefore be eliminated in the consolidation process at the end of 2018, is:

Accepted Answer

A)  $15,000. 
B)  $20,000. 
C)  $32,500. 
D)  $30,000. 
E)  $110,000. 
A)  $15,000. 
B)  $20,000. 
C)  $32,500. 
D)  $30,000. 
E)  $110,000.

Question 6

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

Accepted Answer

A)  Debit accumulated depreciation, $46,000. 
B)  Debit accumulated depreciation, $48,000. 
C)  Credit accumulated depreciation, $48,000. 
D)  Credit accumulated depreciation, $46,000. 
E)  Debit accumulated depreciation, $2,000. 
A)  Debit accumulated depreciation, $46,000. 
B)  Debit accumulated depreciation, $48,000. 
C)  Credit accumulated depreciation, $48,000. 
D)  Credit accumulated depreciation, $46,000. 
E)  Debit accumulated depreciation, $2,000.

Question 7

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

Accepted Answer

A)  Retained earnings. 
B)  Cost of goods sold. 
C)  Inventory. 
D)  Investment in Fisher Company. 
E)  Sales. 
A)  Retained earnings. 
B)  Cost of goods sold. 
C)  Inventory. 
D)  Investment in Fisher Company. 
E)  Sales.

Question 8

Assume that Icecap sold inventory to Polar at a markup equal to 25% of cost.Intra-entity transfers were $70,000 in 2017 and $112,000 in 2018.Of this inventory, $29,000 of the 2017 transfers were retained and then sold by Polar in 2018, whereas $49,000 of the 2018 transfers was held until 2019.
Required:
For the consolidated financial statements for 2018, determine the balances that would appear for the following accounts: (i) Cost of Goods Sold; (ii) Inventory; and (iii) Net income attributable to the noncontrolling interest.

Accepted Answer

The answer of Assume that Icecap sold inventory to Polar...

Question 9

Hambly Corp.owned 80% of the voting common stock of Stroban Co.During 2018, Stroban sold a parcel of land to Hambly.The land had a book value of $82,000 and was sold to Hambly for $145,000.Stroban's reported net income for 2018 was $119,000.Required:
Assuming there are no other intra-entity transactions nor excess amortizations, What was the net income attributable to the noncontrolling interest of Stroban?

Accepted Answer

The answer of Hambly Corp.owned 80% of the voting common...

Question 10

An intra-entity transfer took place whereby the book value exceeded the transfer price of a depreciable asset.Which statement is true for the year after the year of transfer?

Accepted Answer

A)  A worksheet entry is made with a debit to retained earnings for an upstream transfer. 
B)  A worksheet entry is made with a credit to retained earnings for an upstream transfer. 
C)  A worksheet entry is made with a debit to retained earnings for a downstream transfer. 
D)  A worksheet entry is made with a debit to investment in subsidiary for a downstream transfer. 
E)  No worksheet entry is necessary. 
A)  A worksheet entry is made with a debit to retained earnings for an upstream transfer. 
B)  A worksheet entry is made with a credit to retained earnings for an upstream transfer. 
C)  A worksheet entry is made with a debit to retained earnings for a downstream transfer. 
D)  A worksheet entry is made with a debit to investment in subsidiary for a downstream transfer. 
E)  No worksheet entry is necessary.

Question 11

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.

Accepted Answer

The answer of Flintstone Inc.acquired all of Rubble Co.on January...

Question 12

Justings Co.owned 80% of Evana Corp.During 2018, Justings sold to Evana land with a book value of $48,000.The selling price was $70,000.For purposes of the December 31, 2018 consolidated financial statements, at what amount should the land be reported?

Accepted Answer

A)  $17,600. 
B)  $22,000. 
C)  $48,000. 
D)  $56,000. 
E)  $70,000. 
A)  $17,600. 
B)  $22,000. 
C)  $48,000. 
D)  $56,000. 
E)  $70,000.

Question 13

What is the total of consolidated revenues?

Accepted Answer

A)  $700,000. 
B)  $644,000. 
C)  $588,000. 
D)  $560,000. 
E)  $840,000. 
A)  $700,000. 
B)  $644,000. 
C)  $588,000. 
D)  $560,000. 
E)  $840,000.

Question 14

How do upstream and downstream inventory transfers differ in their effect in a year-end consolidation?

Accepted Answer

If the sale of inventory is downstream (

Question 15

What is the total of consolidated cost of goods sold?

Accepted Answer

A)  $196,000. 
B)  $212,800. 
C)  $184,800. 
D)  $203,000. 
E)  $168,000. 
A)  $196,000. 
B)  $212,800. 
C)  $184,800. 
D)  $203,000. 
E)  $168,000.

Question 16

How would net income attributable to the noncontrolling interest be different if the transfers had been for the same amount and cost, but from Stendall to Edgar?

Accepted Answer

A)  Net income attributable to the noncontrolling interest would have decreased by $6,000. 
B)  Net income attributable to the noncontrolling interest would have increased by $24,000. 
C)  Net income attributable to the noncontrolling interest would have increased by $20,000. 
D)  Net income attributable to the noncontrolling interest would have decreased by $18,000. 
E)  Net income attributable to the noncontrolling interest would have decreased by $56,000. 
A)  Net income attributable to the noncontrolling interest would have decreased by $6,000. 
B)  Net income attributable to the noncontrolling interest would have increased by $24,000. 
C)  Net income attributable to the noncontrolling interest would have increased by $20,000. 
D)  Net income attributable to the noncontrolling interest would have decreased by $18,000. 
E)  Net income attributable to the noncontrolling interest would have decreased by $56,000.

Question 17

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?

Accepted Answer

A)  Retained earnings. 
B)  Cost of goods sold. 
C)  Inventory. 
D)  Investment in Fisher Company. 
E)  Sales. 
A)  Retained earnings. 
B)  Cost of goods sold. 
C)  Inventory. 
D)  Investment in Fisher Company. 
E)  Sales.

Question 18

For consolidation purposes, what amount would be debited to January 1 retained earnings for the 2018 consolidation worksheet entry with regard to the unrecognized intra-entity gross profit remaining in ending inventory with respect to the 2017 intra-entity transfer of merchandise?

Accepted Answer

A)  $ 240. 
B)  $ 300. 
C)  $2,000. 
D)  $1,600. 
E)  $ 270. 
A)  $ 240. 
B)  $ 300. 
C)  $2,000. 
D)  $1,600. 
E)  $ 270.

Question 19

Compute the gain or loss reported on Stark's books prior to consolidation from the intra-entity transfer of land in 2017.

Accepted Answer

A)  $80,000 gain. 
B)  $80,000 loss. 
C)  $ 5,000 gain. 
D)  $ 5,000 loss. 
E)  $85,000 loss. 
A)  $80,000 gain. 
B)  $80,000 loss. 
C)  $ 5,000 gain. 
D)  $ 5,000 loss. 
E)  $85,000 loss.

Question 20

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

Accepted Answer

A)  $1,925. 
B)  $1,825. 
C)  $2,000. 
D)  $1,500. 
E)  $7,000. 
A)  $1,925. 
B)  $1,825. 
C)  $2,000. 
D)  $1,500. 
E)  $7,000.

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

Compute the amortization of gain through a depreciation adjustment for 2018 for consolidation purposes.

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

On a consolidation worksheet, having used the equity method, what adjustment would be made for 2018 regarding the land transfer?

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

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

An intra-entity transfer took place whereby the book value exceeded the transfer price of a depreciable asset.Which statement is true for the year after the year of transfer?

Justings Co.owned 80% of Evana Corp.During 2018, Justings sold to Evana land with a book value of $48,000.The selling price was $70,000.For purposes of the December 31, 2018 consolidated financial statements, at what amount should the land be reported?

What is the total of consolidated revenues?

How do upstream and downstream inventory transfers differ in their effect in a year-end consolidation?

What is the total of consolidated cost of goods sold?

How would net income attributable to the noncontrolling interest be different if the transfers had been for the same amount and cost, but from Stendall to Edgar?

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?

For consolidation purposes, what amount would be debited to January 1 retained earnings for the 2018 consolidation worksheet entry with regard to the unrecognized intra-entity gross profit remaining in ending inventory with respect to the 2017 intra-entity transfer of merchandise?

Compute the gain or loss reported on Stark's books prior to consolidation from the intra-entity transfer of land in 2017.

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

The Equity Method of Accounting for Investments

A: the Equity Method of Accounting for Investments

Consolidation of Financial Information

A: Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

A: Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

A: Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

A: Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Consolidated Financial Statements - Ownership Patterns and Income Taxes

A: Consolidated Financial Statements - Ownership Patterns and Income Taxes

Segment and Interim Reporting

A: Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

A: Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

A: Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

A: Worldwide Accounting Diversity and International Accounting Standards

Financial Reporting and the Securities and Exchange Commission

A: Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

A: Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

A: Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

A: Partnerships: Termination and Liquidation

Accounting for State and Local Governments, Part I

A: Accounting for State and Local Governments, Part I

Accounting for State and Local Governments, Part II

A: Accounting for State and Local Governments, Part II

Accounting for Not-For-Profit Entities

A: Accounting for Not-For-Profit Entities

Accounting for Estates and Trusts

A: Accounting for Estates and Trusts

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