On January 1, 2000 Tiger Company acquired all of the stock of Rebel Company at book value
Question:
On January 1, 2000 Tiger Company acquired all of the stock of Rebel Company at book value | |||||||||
Tiger Company accounts for its investment of Rebel Company using the initial value method and Rebel pays no dividends | |||||||||
On December 1, 2018 Tiger Company sold merchandise (inventory) to Rebel Company on credit | |||||||||
Tiger had purchased the merchandise for $400,000 and sold it to Rebel for $800,000. | |||||||||
at the end of the year, Rebel had not sold any of the Tiger merchandise and did not pay off their receivable | |||||||||
In 2019 Rebel sold 75% of the merchandise acquired from Tiger to Lion Company for $1,000,000 | |||||||||
In 2020 Rebel sold the remaining merchandise for $400,000 | |||||||||
REQUIRED: | |||||||||
A) MAKE THE JOURNAL ENTRY FOR TIGER WHEN IT SELLS THE MERCHANDISE TO REBEL | |||||||||
TIGER USES PERPETUAL INVENTORY METHOD | |||||||||
B) MAKE THE JOURNAL ENTRY REBEL MAKES WHEN IT BUYS THE MERCHANDISE FROM TIGER | |||||||||
REBEL ALSO USES PERPETUAL INVENTORY | |||||||||
C) MAKE THE NECESSARY WORKSHEET ENTRIES IN 2018 | |||||||||
d) in 2018 Tiger reported unconsolidated income of $400,000 and Rebel reported income of $80,000 what | |||||||||
is consolidated income? | |||||||||
e) make the necessary worksheet entry in 2019 | |||||||||
f) in 2019 Tiger reported unconsolidated income of $400,000 and Rebel reported income of $80,000 what | |||||||||
is consolidated income? | |||||||||
g) make the necessary worksheet entry in 2020 | |||||||||
h) in 2020 Tiger reported unconsolidated income of $400,000 and Rebel reported income of $80,000 what | |||||||||
is consolidated income? |
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker