intercomapny transaction
Sun is a 90 percent–owned subsidiary of Pam Corporation, acquired at book value several years ago. Comparative separate-company income statements for the affiliates for 2016 are as follows: Pam Corporation Sun Corporation Sales $750,000 $350,000 Income from Sun 54,000 — Gain on building 15,000 — Income credits 819,000 350,000 Cost of sales 500,000 200,000 Operating expenses 150,000 75,000 Income debits 650,000 275,000 Net income $169,000 $ 75,000 On January 5, 2016, Pam sold a building with a 10-year remaining useful life to Sun at a gain of $15,000. Sun paid dividends of $50,000 during 2016. REQUIRED 1. Reconstruct the journal entries made by Pam during 2016 to account for its investment in Sun. Explanations of the journal entries are required. 2. Prepare a consolidated income statement for Pam Corporation and Subsidiary for 2016.
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Sun Corporation was created on January 1, 20X2, and quickly became successful. On January 1, 20X6,...
Sun Corporation was created on January 1, 20X2, and quickly became successful. On January 1, 20X6, its owner sold 80 percent of the stock to Planet Company at underlying book value. At the date of that sale, the fair value of the remaining shares was equal to 20 percent of the book value of Sun. Planet continued to operate the subsidiary as a separate legal entity and used the equity method in accounting for its investment in Sun. The following...
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P Company regularly sells merchandise to its 80%-owned subsidiary, S Corporation. In 2016, P sold merchandise...
P Company regularly sells merchandise to its 80%-owned
subsidiary, S Corporation. In 2016, P sold merchandise that cost
$240,000 to S for $300,000. Half of this merchandise remained in
S’s December 31, 2016 inventory. During 2017, P sold merchandise
that cost $375,000 to S for $468,000. Forty percent of this
merchandise inventory remained in S’s December 31, 2017 inventory.
Selected income statement information for the two affiliates for
the year 2017 is as follows:
P
S
Sales Revenue
$2,250,000
$1,125,000...
Which of the following events is an intercompany transaction? A) a capital contribution B) a parent...
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ABC Corporation has a piece of equipment that cost $500,000 and was placed in service on...
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Use negative signs with answers in the Consolidated column for Cost of goods sold, Operating expenses...
Use negative signs with answers in the
Consolidated column for Cost of goods sold, Operating expenses and
Dividends.
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P2-4 Journal entries for interim acquisition and extraordinary gains Ahmad Corporation paid $350,000 for a 30...
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P Company regularly sells merchandise to its 80%-owned
subsidiary, S Corporation. In 2016, P sold merchandise that cost
$240,000 to S for $300,000. Half of this merchandise remained in
S’s December 31, 2016 inventory. During 2017, P sold merchandise
that cost $375,000 to S for $468,000. Forty percent of this
merchandise inventory remained in S’s December 31, 2017 inventory.
Selected income statement information for the two affiliates for
the year 2017 is as follows:
P
S
Sales Revenue
$2,250,000
$1,125,000...
Which of the following events is an intercompany transaction? A) a capital contribution B) a parent corporation's sale of stock of a subsidiary corporation to a nonmember of the group C) dividend payment received from a subsidiary corporation to its parent corporation; the subsidiary corporation is not an includible corporation D) accrual of interest on a loan made by one group member to another group member; both group members use the accrual method of accounting 46. Which of the following...
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Use negative signs with answers in the
Consolidated column for Cost of goods sold, Operating expenses and
Dividends.
Parent Subsidiary Subsidiary Balance sheet $800,000 Assets (480,000) Cash 320,000 Accounts receivable Parent Income statement Sales $4,350,000 Cost of goods sold (3,050,000) Gross profit 1,300,000 Income (loss) from subsidiary 15,000 Operating expenses (830,000) Net income $485,000 Statement of retained earnings BOY retained earnings | $2,000,000 Net income 485,000 Dividends (125,000) Ending retained earnings $2,360,000 - Inventory (200,000) Equity investment $120,000 Property, plant...
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