Questions from Financial Accounting

Q: In the period in which an intercompany sale occurs, how do

In the period in which an intercompany sale occurs, how do the consolidation entries differ when unrealized profits pertain to an intangible asset rather than a tangible asset?

Q: When is unrealized profit on an intercompany sale of land considered realized

When is unrealized profit on an intercompany sale of land considered realized? When is profit on an intercompany sale of equipment considered realized? Why do the treatments differ?

Q: A parent company may use on its books one of several different

A parent company may use on its books one of several different methods of accounting for its ownership of a subsidiary: (a) cost method, (b) modified equity method, or (c) fully adjusted equity met...

Q: What dollar amounts in the consolidated financial statements will be incorrect if

What dollar amounts in the consolidated financial statements will be incorrect if intercompany services are not eliminated?

Q: How are unrealized profits treated in the consolidated income statement if the

How are unrealized profits treated in the consolidated income statement if the intercompany sale occurred in a prior period and the transferred item is sold to a nonaffiliate in the current period?

Q: How is the effect of unrealized intercompany profits on consolidated net income

How is the effect of unrealized intercompany profits on consolidated net income different between an upstream and a downstream sale?

Q: Sweeny Corporation owns 60 percent of Bitner Company’s shares. Partial 20X2

Sweeny Corporation owns 60 percent of Bitner Company’s shares. Partial 20X2 financial data for the companies and consolidated entity were as follows: On January 1, 20X2, Sweeny&aci...

Q: Carroll Company sells all its output at 25 percent above cost.

Carroll Company sells all its output at 25 percent above cost. Pacific Corporation purchases all its inventory from Carroll. Selected information on the operations of the companies over the past three...

Q: Master Corporation acquired 70 percent of Crown Corporation’s voting stock on January

Master Corporation acquired 70 percent of Crown Corporation’s voting stock on January 1, 20X2, for $416,500. The fair value of the noncontrolling interest was $178,500 at the date of acquisition. Crow...

Q: In preparing the consolidation worksheet for Bolger Corporation and its 60 percent

In preparing the consolidation worksheet for Bolger Corporation and its 60 percent–owned subsidiary, Feldman Company, the following consolidation entries were proposed by Bolger&acir...