Question: How does the adjustment differ when there is a sale
How does the adjustment differ when there is a sale of an intangible asset; e. g., patent with limited life instead of a capital asset from the subsidiary to the parent?
Answer to relevant QuestionsWhen a fair-valued asset is sold by a subsidiary to its parent, how does the amount of the fair-value increment affect the unrealized profit elimination? Explain the composition of consolidated retained earnings in terms of the parent’s and subsidiary’s separate-entity retained earnings. Dudes Outfitters Ltd., is a 70%- owned subsidiary of Trail Ltd. On January 10, 20X2, Dudes sold some display cases to Trail Ltd. for $ 95,000, recognizing a gain of $ 45,000 before tax on the transaction. Trail Ltd. ...On April 2, 20X4, Curry Ltd. acquired 40% of the outstanding common shares of Jasmine Ltd. by issuing one share of Curry plus $ 5 cash for each of Jasmine’s shares acquired. At the time of purchase, Curry’s shares were ...On January 1, 19X9, Apache Company purchased 80% of the outstanding voting shares of Navaho Company for $ 300,000. Navaho’s assets and liabilities all had fair values that were equal to their carrying values. The $ 80,000 ...
Post your question