Questions from Advanced Accounting

Q: "Under the equity method, the investment account is adjusted for

"Under the equity method, the investment account is adjusted for the investor's share of post-acquisition earnings computed by the consolidation method." Explain this statement.

Q: At the end of the year, the parent's investment account had

At the end of the year, the parent's investment account had an equity method balance of $120,000. At this time, its 75%-owned subsidiary had shareholders' equity totaling $125,000. How much was the un...

Q: How should transfers of resources between funds be presented in fund financial

How should transfers of resources between funds be presented in fund financial statements? How should they be presented in a single set of non-fund financial statements?

Q: In what way are an individual's pants with four pockets similar to

In what way are an individual's pants with four pockets similar to a parent company with three subsidiaries? Explain, with reference to intercompany revenues and expenses.

Q: Describe the effects that the elimination of intercompany sales and intercompany profits

Describe the effects that the elimination of intercompany sales and intercompany profits in ending inventory will have on the various elements of the consolidated financial statements.

Q: What difference does it make on the consolidated financial statements if there

What difference does it make on the consolidated financial statements if there are unrealized profits in land resulting from a downstream transaction as compared with an upstream transaction?

Q: When there are unrealized profits in inventory at the end of Year

When there are unrealized profits in inventory at the end of Year 1, consolidated profit would normally be affected for Years 1 and 2. Explain.

Q: An intercompany gain on the sale of land is eliminated in the

An intercompany gain on the sale of land is eliminated in the preparation of the consolidated statements in the year that the gain was recorded. Will this gain be eliminated in the preparation of subs...

Q: A subsidiary periodically revalues its land to fair value under the revaluation

A subsidiary periodically revalues its land to fair value under the revaluation option for property, plant, and equipment. Explain the adjustments required to the consolidated financial statements if...

Q: Describe the journal entry on the parent's books under the equity method

Describe the journal entry on the parent's books under the equity method to adjust for unrealized profits in ending inventory for upstream transactions.