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Exam 5: Consolidated Financial Statements Intra-Entity Asset Transactions

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Question 61

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

A) $ 5,000 loss.
B) $ 7,000 gain.
C) $12,000 gain.
D) $ 7,000 loss.
E) $12,000 loss.

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Question 62

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

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

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Question 63

Multiple Choice

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Assume the same information, except Shannon sold inventory to Patti.Compute consolidated sales.

Throughout 2018, Cleveland Co.sold inventory to Leeward Co., its subsidiary.From a consolidated financial statement point of view, when will the gross profit on this transfer be recognized?

What is the total of consolidated operating expenses?

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.

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

Included in the amounts for Pot's sales were Pot's sales for merchandise to Skillet for $140,000.There were no sales from Skillet to Pot.Intra-entity transfers had the same markup as sales to outsiders.Skillet had resold all of the intra-entity transfers (purchases) from Pot to outside parties during 2018.What are consolidated sales and cost of goods sold for 2018?

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

What is the total of consolidated revenues?

Assuming there are no excess amortizations or other intra-entity transactions, compute income from Stark reported on Parker's books for 2019.

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

What is the consolidated gain or loss on equipment for 2017?

Which of the following will be included in a consolidation entry for 2018?

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?

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:

Which of the following statements is true concerning an intra-entity transfer of a depreciable asset?

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?

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?

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?