In the period in which an intercompany sale occurs, how do the consolidation elimination entries differ when unrealized profits pertain to an intangible asset rather than a tangible asset?
Answer to relevant QuestionsWhen 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?Diamond Manufacturing Company regularly purchases janitorial and maintenance services from its wholly owned subsidiary, Schwartz Maintenance Services Inc. Schwartz bills Diamond monthly at its regular rates for the services ...Pam Corporation holds 70 percent ownership of Northern Enterprises. On December 31, 20X6, Northern paid Pam $40,000 for a truck that Pam had purchased for $45,000 on January 1, 20X2. The truck was considered to have a ...Verry Corporation owns 75 percent of Spawn Corporation’s voting common stock. Verry reported income from its separate operations of $90,000 and $110,000 in 20X4 and 20X5, respectively. Spawn reported net income of $60,000 ...Norgaard Corporation purchased management consulting services from its 75 percent owned subsidiary, Bline Inc. During 20X3, Norgaard paid Bline $123,200 for its services. For the year 20X4, Bline billed Norgaard $138,700 for ...
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