Question: When a subsidiary sells inventory to a parent the intra entity
When a subsidiary sells inventory to a parent, the intra-entity profit is removed from the subsidiary’s income and reduces the income allocation to the noncontrolling interest. Is the profit permanently eliminated from the noncontrolling interest, or is it merely shifted from one period to the next? Explain.
Relevant QuestionsThe consolidation process applicable when intra-entity land transfers have occurred differs somewhat from that used for intra-entity inventory sales. What differences should be noted?1. What is the primary reason we defer financial statement recognition of gross profits on intra-entity sales for goods that remain within the consolidated entity at year end?a. Revenues and COGS must be recognized for all ...12. What is the total of consolidated expenses?a. $30,000.b. $36,000.c. $37,500.d. $39,000.Use the following data for problem:On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 ...Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2011, the companies had the following account ...Following are financial statements for Moore Company and Kirby Company for 2011:Moore purchased 90 percent of Kirby on January 1, 2010, for $657,000 in cash. On that date, the 10 percent noncontrolling interest was assessed ...
Post your question