“The realization of intercompany inventory and depreciable asset profits is really an adjustment made in the preparation of consolidated income statements to arrive at historical cost numbers.” Explain.
Answer to relevant QuestionsAn intercompany inventory profit is realized when the inventory is sold out-side the entity. Is this also the case with respect to an intercompany profit in a depreciable asset? Explain. Required: Determine how this transaction should have been accounted for assuming that (a) Enron controlled LIM2 and used consolidated financial statements to report its investment in LIM2; (b) Enron had significant ...Alpha Corporation owns 90% of the ordinary shares of Beta Corporation and uses the equity method to account for its investment. On January 1, Year 4, Alpha purchased $160,000 of Beta’s 10% bonds for $150,064. Beta’s bond ...SENS Ltd. acquired equipment on January 1, Year 1, for $500,000. The equipment was depreciated on a straight-line basis over an estimated useful life of 10 years. On January 1, Year 3, SENS sold this equipment to MEL Corp., ...Access the 2011 consolidated financial statements for Barrick Gold Corporation by going to investor relations section of the company's website. Answer the questions below. Round percentages to one decimal point and other ...
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