Ford Products transferred $300,000 of accounts receivable to a newly established subsidiary whose sole purpose was to
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Ford Products transferred $300,000 of accounts receivable to a newly established subsidiary whose sole purpose was to buy and factor accounts receivable from Ford. Ford received a 65 percent interest in the subsidiary while another company contributed $140,000 cash to be a 35 percent owner. During the first year, the subsidiary reported $320,000 of revenue, $240,000 of expenses, and paid $48,000 of cash dividends. At what value will this variable interest entity be reported on Ford Products’ balance sheet at year end, immediately prior to consolidation?
$320,800
$264,800
$351,200
$240,000
Related Book For
Financial Accounting and Reporting a Global Perspective
ISBN: 978-1408076866
4th edition
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
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