Prance Athleticwear Company owns all of the soling stock et Stallion Shoes. Acquisition cost was $7 million
Question:
Prance Athleticwear Company owns all of the soling stock et Stallion Shoes. Acquisition cost was $7 million in excess of Stallion's book value of $3 million, and theexcess was attributed to indefinite lived identifiable intangibles of $2 million, and $5 million of goodwill. As of the beginning of the current year, the identifiable intangibles are impaired by 5500.000, and goodwill is not impaired. There is no impairment of either intangible in the current year. Follow mg is information on intercompany merchandise transactions between Prance and Stallion for the current year:
? Intercompany profit in Prance's beginning inventory, purchased from Stallion, is $300,000.
? Intercompany profit in Stallion's beginning inventory, purchased from Prance, is $400,0110.
? Intercompany profit in Prance's ending ins enter), purchased from Stallion, is $200,000.
? Intercompany profit in Stallion's ending ins cowry, purchased from Prance, is 5250,01X),
? Total sales from Stallion to Prance, at the pricy charged to Prance, were $7 million.
? Total sales from Prance to Stallion, at the price charged to Stallion, were $5 million
Prance uses the complete equity method to account for its investment in Stallion On its own n books Die separate trial balances for Prance and Stallion at the end of the current year are below.
Required
Prepare a working paper to consolidate the trial balances of Prance and Stallion. Label your eliminating entries (C), (I), (E), and (R).
Fundamentals of Taxation 2015
ISBN: 9781259293092
8th edition
Authors: Ana Cruz, Michael Deschamps, Frederick Niswander, Debra Prendergast, Dan Schisler, Jinhee Trone