Questions from Financial Accounting

Q: Many companies transfer inventories from one affiliate to another. Often the

Many companies transfer inventories from one affiliate to another. Often the companies have integrated operations in which one affiliate provides the raw materials, another manufactures finished produ...

Q: Plug Corporation purchased 60 percent of Coy Company’s common stock approximately 10

Plug Corporation purchased 60 percent of Coy Company’s common stock approximately 10 years ago. On January 1, 20X2, Coy sold equipment to Plug for $850,000 and recorded a $150,000 loss on the sale. Co...

Q: Dream Corporation owns 90 percent of Classic Company’s common stock and 70

Dream Corporation owns 90 percent of Classic Company’s common stock and 70 percent of Plain Company’s stock. Dream provides legal services to each subsidiary and bills it for 150 percent of the cost o...

Q: Current reporting standards require the consolidated entity to include all the revenues

Current reporting standards require the consolidated entity to include all the revenues, expenses, assets, and liabilities of the parent and its subsidiaries in the consolidated financial statements....

Q: Diamond Manufacturing Company regularly purchases janitorial and maintenance services from its wholly

Diamond Manufacturing Company regularly purchases janitorial and maintenance services from its wholly owned subsidiary, Schwartz Maintenance Services Inc. Schwartz bills Diamond monthly at its regular...

Q: Companies have many different practices for pricing transfers of goods and services

Companies have many different practices for pricing transfers of goods and services from one affiliate to another. Regardless of the approaches used for internal decision making and performance evalua...

Q: Where is the balance assigned to the noncontrolling interest reported in the

Where is the balance assigned to the noncontrolling interest reported in the consolidated balance sheet?

Q: Why must a noncontrolling interest be reported in the consolidated balance sheet

Why must a noncontrolling interest be reported in the consolidated balance sheet?

Q: Why must inventory transfers to related companies be eliminated in preparing consolidated

Why must inventory transfers to related companies be eliminated in preparing consolidated financial statements?

Q: How is the amount assigned to the noncontrolling interest normally determined when

How is the amount assigned to the noncontrolling interest normally determined when a consolidated balance sheet is prepared immediately after a business combination?