Question: When a fair valued asset is sold to outsiders what
When a fair- valued asset is sold to outsiders, what is the disposition of the fair-value increment when the statements are consolidated in the year of the sale? What is the disposition of the increment in years following the sale?
Answer to relevant QuestionsWhat does the equity- basis balance of the investment account for a subsidiary represent (e.g., cost of the investment, market value of the investment, etc.)?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 January 1, 20X1, ABC Limited purchased 90% of the outstanding common shares of XYZ Limited for $ 150,000. At that date, XYZ Limited’s condensed statement of financial position and fair values were as follows:Assume a ...On January 1, 20X0, Mariachi Corporation acquired 70% of the outstanding shares of Sombrero Company for $ 85,000 cash. On that date, Sombrero Company had $ 35,000 of common shares outstanding and $ 25,000 of retained ...Companies L and D both operate food processing plants, and both operate a chain of retail food stores. Company L transfers all of the output from its processing plants to its stores, while Company D’s processing plants ...
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