Barker Company owns 80 percent of the outstanding voting stock of Walden Company. During the current year, intra-entity sales amount to $100,000. These transactions were made with a gross profit rate of 40 percent of the transfer price. In consolidating the two companies, what amount of these sales would be eliminated?
Answer to relevant Questions1. What is the primary reason we defer financial statement recognition of gross profits on intra-entity sales for goods that remain within the consolidated entity at year end?a. Revenues and COGS must be recognized for all ...Wallton Corporation owns 70 percent of the outstanding stock of Hastings, Incorporated. On January 1, 2009, Wallton acquired a building with a 10-year life for $300,000. Wallton anticipated no salvage value, and the building ...Smith Corporation acquired 80 percent of the outstanding voting stock of Kane, Inc., on January 1, 2010, when Kane had a net book value of $400,000. Any excess fair value was assigned to intangible assets and amortized at a ...On January 1, 2011, Sledge had common stock of $120,000 and retained earnings of $260,000. During that year, Sledge reported sales of $130,000, cost of goods sold of $70,000, and operating expenses of $40,000.On January 1, ...On January 1, 2009, Plymouth Corporation acquired 80 percent of the outstanding voting stock of Sander Company in exchange for $1,200,000 cash. At that time, although Sander’s book value was $925,000, Plymouth assessed ...
Post your question