“Some intercompany gains (losses) are realized for consolidation purposes subsequent to their actual recording by the affiliates, while others are recorded by the affiliates subsequent to their realization for consolidation purposes.” Explain, referring to the type of gains (losses) that apply in each case.
Answer to relevant QuestionsExplain how the recognition of gains on the elimination of intercompany bond holdings is consistent with the principle of recording gains only when they are realized. When there has been an intercompany sale of a used depreciable asset (i.e., accumulated depreciation has been recorded for this asset), it is necessary to gross up the asset and accumulated depreciation when preparing the ...Bakersfield Ball Boys Limited (BBB) operates a Canadian professional baseball club, the Bakersfield Ball Boys, that won the Canadian Baseball League title in October Year 10. BBB is 30% owned by Mr. Bill Griffin, ...Financial statements of Champlain Ltd. and its 80%-owned subsidiary Samuel Ltd. as at December 31, Year 5, are presented below. Additional Information • Champlain acquired 8,000 ordinary shares of Samuel on January 1, ...Pure Company purchased 70% of the ordinary shares of Gold Company on January 1, Year 6, for $483,000 when the latter company’s accumulated depreciation, ordinary shares and retained earnings were $75,000, $500,000 and ...
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