2 A parent makes an interest-bearing loan to its 90%-owned subsidiary in 2016, which is still...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
2 A parent makes an interest-bearing loan to its 90%-owned subsidiary in 2016, which is still outstanding in 2017. The eliminating entries (1) on the consolidation working paper for 2017, elated to this loan. reduce investment in subsidiary by the amount of 2016's interest revere b. reduce the subsidiary's beginning retained earnings by the amount of 2016's interest revenue. reduce investment in subsidiary by the moont of interest owing at the end of 2017. d. have no effect on investment in seboidi or the subsidiary's beginning retained earnings. & Petronet sells merchandise to its 80-percent owned subsidiary Sonata at a markup of 20 percent on cost. During 2017, Petronet charges Sonate $40,000 for merchandise sales. Sonata's 2017 beginning inven- $480,000 in merchandise purchased from Petronet. Petronet uses the complete equity method to record its tory contains $540,000 in merchandise purchases from Petronet. Sonata's 2017 ending inventory contains investment in Sonata. How are Petronet's 2017 equity in net income of Sonata and 2017 consolidated income to the noncontrolling interest affected by intercompany merchandise transactions? $0 a. Equity in net income $10,000 increase $8,000 increase $12,000 increase C. d. $ 9,600 increase b. LO 1 LO 2 Noncontrolling interest in net income $0 $2,000 increase $0 $2,400 increase uns 90 percent of Sesa. At the start of 2016, Sesa sold buildings carried at $4,000,000, ne nining life of 10 years and straight-line depreciati die still 2 A parent makes an interest-bearing loan to its 90%-owned subsidiary in 2016, which is still outstanding in 2017. The eliminating entries (1) on the consolidation working paper for 2017, elated to this loan. reduce investment in subsidiary by the amount of 2016's interest revere b. reduce the subsidiary's beginning retained earnings by the amount of 2016's interest revenue. reduce investment in subsidiary by the moont of interest owing at the end of 2017. d. have no effect on investment in seboidi or the subsidiary's beginning retained earnings. & Petronet sells merchandise to its 80-percent owned subsidiary Sonata at a markup of 20 percent on cost. During 2017, Petronet charges Sonate $40,000 for merchandise sales. Sonata's 2017 beginning inven- $480,000 in merchandise purchased from Petronet. Petronet uses the complete equity method to record its tory contains $540,000 in merchandise purchases from Petronet. Sonata's 2017 ending inventory contains investment in Sonata. How are Petronet's 2017 equity in net income of Sonata and 2017 consolidated income to the noncontrolling interest affected by intercompany merchandise transactions? $0 a. Equity in net income $10,000 increase $8,000 increase $12,000 increase C. d. $ 9,600 increase b. LO 1 LO 2 Noncontrolling interest in net income $0 $2,000 increase $0 $2,400 increase uns 90 percent of Sesa. At the start of 2016, Sesa sold buildings carried at $4,000,000, ne nining life of 10 years and straight-line depreciati die still
Expert Answer:
Answer rating: 100% (QA)
Answer Sonatas Closing Inventory 480000 Sonatas Beginning Inventory 540000 If P... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III
Posted Date:
Students also viewed these accounting questions
-
On the consolidation working paper at the date of acquisition, elimination E credits the investment account by a. $ 2,400 b. $ 3,400 $ c. 5,000 d. $13,000 Use the following information to answer...
-
On the consolidation working paper at the date of acquisition, elimination R debits identifiable intangible assets by a. $10,000 b. $13,000 c. $15,000 d. $23,000 Use the following information to...
-
Parent Corporation has owned all 100 shares of Subsidiary Corporation common stock since 2008. Parent has been in the business of manufacturing and selling light fixtures, and Subsidiary has been in...
-
11) Wayland Manufacturing uses a normal cost system and had the following data available for 2010: Direct materials purchased on account Direct materials requisitioned 82,000 Direct labor cost...
-
If, in Exercise 7-2, cash on hand was $11, prepare the entry to replenish the petty cash on July 31.
-
A capacitor is constructed from two square plates of sides and separation d, as suggested in Figure P26.64. You may assume that d is much less than . The plates carry charges +Q 0 and -Q 0. A block...
-
Identify and describe the key attributes that might mitigate a red flag, suggesting that no bad act or compliance issues exist.
-
Beverage Products, LLC, manufactures metal beverage containers. The division that manufactures soft-drink beverage cans for the North American market has two plants that operate 24 hours a day, 365...
-
Suppose that farmers have a mandatory demand expansion program where all farmers pay a certain amount to fund a promotion program. You have estimated the following market supply and demand functions...
-
Crane Library, a nonprofit organization, presented the following statement of financial position and statement of activities for its fiscal year ended February 28, 2024. Assets Current Assets Cash...
-
You are hired as an expert CPA to institute effective internal controls and monitoring systems at the Knottyville country club. What controls and monitoring systems would you recommend?
-
How do ecological gradients, such as latitudinal, altitudinal, and habitat gradients, shape species distributions, community assemblages, and ecosystem processes, and what mechanisms underlie the...
-
A prime, fully leased downtown Philadelphia office building has a projected annual Net Operating Income (NOI) for 2021 of $10,000,000. You own it and have been negotiating to sell it to a major Real...
-
What are the ecological implications of photosynthesis in global carbon cycling, ecosystem productivity, biodiversity dynamics, and climate regulation, and how are these processes influenced by...
-
What are the trade-offs and constraints that govern the evolution of adaptive traits, including physiological, morphological, and behavioral adaptations, and how do these trade-offs impact the...
-
What are the ethical, social, and cultural dimensions of ecosystem stewardship and governance, including indigenous knowledge systems, traditional ecological knowledge, and participatory approaches,...
-
Question 5: Denny views Scotch (S) and Cigars (C) as perfect complements. He always consumes them in equal proportions. One without the other gives him no utility. As such, his utility function is...
-
For the following exercises, write the first four terms of the sequence. a n = 2 n 2
-
Following are descriptions of actual funds found in state CAFRs. 1. The Financial Institutions Deposits Fund is used to account for security deposits held by the Michigan State Treasurer on behalf of...
-
On January 3, 2012, Prance Corporation purchased all of the business operations of Step Corporation for $1,800,000 cash. The acquisition is recorded as a statutory merger. Step's identifiable assets...
-
Lenox County provides the following information on its governmental and enterprise funds: Required In the governmental funds financial statements, which of these funds are reported separately as...
-
An atom loses an electron to another atom. Is this an example of a physical or chemical change? (a) chemical change involving the formation of ions (b) physical change involving the formation of ions...
-
Aluminum ions carry a 3+ charge, and chloride ions carry a 1- charge. What is the chemical formula for the ionic compound aluminum chloride? (a) Al 3 Cl (b) AlCl 3 (c) Al 3 Cl 3 (d) AlCl
-
Why are ores so valuable? (a) They are sources of naturally occurring gold. (b) Metals can be efficiently extracted from them. (c) They tend to occur in scenic mountainous regions. (d) They hold many...
Study smarter with the SolutionInn App