Questions from Financial Accounting

Q: When are profits on intercompany sales considered to be realized? Explain

When are profits on intercompany sales considered to be realized? Explain.

Q: How does the introduction of noncontrolling shareholders change the consolidation worksheet?

How does the introduction of noncontrolling shareholders change the consolidation worksheet?

Q: How do unrealized intercompany profits on a downstream sale of inventory made

How do unrealized intercompany profits on a downstream sale of inventory made during the current period affect the computation of consolidated net income and income to the controlling interest?

Q: How do unrealized intercompany profits on an upstream sale of inventory made

How do unrealized intercompany profits on an upstream sale of inventory made during the current period affect the computation of consolidated net income and income to the controlling interest?

Q: Will the consolidation of unrealized intercompany profits on an upstream sale or

Will the consolidation of unrealized intercompany profits on an upstream sale or on a downstream sale in the current period have a greater effect on income assigned to the noncontrolling interest? Why...

Q: When majority ownership is acquired, what portion of the goodwill reported

When majority ownership is acquired, what portion of the goodwill reported in the consolidated balance sheet is assigned to the noncontrolling interest?

Q: What consolidation entry is needed when inventory is sold to an affiliate

What consolidation entry is needed when inventory is sold to an affiliate at a profit and is not resold before the end of the period? (Assume both affiliates use perpetual inventory systems.)

Q: How is the amount to be reported as cost of goods sold

How is the amount to be reported as cost of goods sold by the consolidated entity determined when there have been intercorporate sales during the period?

Q: How is the amount to be reported as consolidated retained earnings determined

How is the amount to be reported as consolidated retained earnings determined when there have been intercorporate sales during the period?

Q: Under what circumstances would a parent company cease consolidation of a subsidiary

Under what circumstances would a parent company cease consolidation of a subsidiary? Explain.