From a consolidated point of view, when should profit be recognized on intercompany sales of depreciable assets? Non-depreciable assets?
Answer to relevant QuestionsIn what circumstances might a consolidated gain be recognized on the sale of assets to a non-affiliate when the selling affiliate recognizes a loss?In what period and in what manner should profits relating to the intercompany sale of depreciable property and equipment be recognized in the consolidated financial statements?Patterson Company owns 80% of the outstanding common stock of Stevens Company. On June 30, 2010, land costing $500,000 is sold by one affiliate to the other for $800,000.Required:Prepare in general journal form the workpaper ...A subsidiary sold an old, abandoned plant to its parent and incurred a loss of $10 million. Can this loss be reported on the subsidiary-only income statement as an extraordinary item?Pitts Company owns 80% of the common stock of Shannon Company. The stock was purchased for $960,000 on January 1, 2009, when Shannon Company’s retained earnings were $675,000. On January 1, 2011, Shannon Company sold fixed ...
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