Sam Corporation is a 90 percent-owned subsidiary of Par Corporation, acquired in 2011. During 2014 Par sells

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Sam Corporation is a 90 percent-owned subsidiary of Par Corporation, acquired in 2011. During 2014 Par sells land to Sam for $100,000 for which it paid $50,000. Sam owns this land at December 31, 2014.

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1. How and in what amount will the sale of land affect Par's income from Sam and net income for 2014 and the balance of Par's Investment in Sam account on December 31, 2014?

2. How will the consolidated financial statements of Par Corporation and Subsidiary for 2014 be affected by the intercompany sale of land?

3. If Sam still owns the land at December 31, 2015, how will Par's income from Sam and net income for 2015 be affected and what will be the effect on Par's Investment in Sam account on December 31, 2015?

4. If Sam sells the land during 2016 for $100,000, how will Par's income from Sam and total consolidated income for 2016 be affected?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Advanced Accounting

ISBN: 978-0133451863

12th edition

Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith

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