P Inc. owns S Corp.  For the current year, P reports net income (without consideration of its investment in S) of $185,000, and the subsidiary reports $105,000.  The parent had a bond payable outstanding on January 1 with a carrying amount of $209,000.  The subsidiary acquired the bond on that date for $196,000.  During the current year, P reported interest expense of $18,000 while S reported interest income of $19,000 both related to the intra-entity bond payable.  What is consolidated net income?

Avatar Ltd (Avatar) purchased $55,000 of bonds at par. The bonds has been classified as one to be held at fair value through other comprehensive income. At the maturity date, the principal of bonds is redeemed at par when the carrying amount of the bonds is $54,200. Total cumulative losses previously recognized in Avatar’s other comprehensive income in respect of the bonds are $800 before derecognition. Required: In accordance with HKFRS 9 ‘Financial Instruments’, what is the net effect of the disposal of the bonds to be recognized in profit or loss and balance of fair value reserve after derecognition?   A. Profit or loss: $0; Fair value reserve: ($1,600)   B. Profit or loss: $800 loss; Fair value reserve: $0   C. Profit or loss: $0; Fair value reserve: $0   D. Profit or loss: $800 gain; Fair value reserve: $0

On 12/31/2020, a parent company purchased the bonds of its subsidiary from the bondholders of the subsidiary for $102,000 cash. The carrying value of the bonds on the general ledger of the subsidiary was $107,000. What amounts will appear on the parent's consolidated balance sheet for 2020? Investment Bonds A) In Bonds Payable $0 $0 Investment Bonds B) In Bonds Payable $102,000 $0 Investment Bonds In Bonds Payable $107,000 $102,000 Investment Bonds D) In Bonds Payable $102,000 $107,000 Investment Bonds E) In Bonds Payable $0 $107,000

SUB is an 80% owned subsidiary of PAR. SUB issued $100,000 of 8%, 10-year bonds for $95,000 on 1/1/2011. Annual interest is paid on 12/31/. PAR purchased the bonds on 1/1/2017, for $102,000. Both companies use the straight-line method to amortize the premium/discount on the bonds. 1) How much gain or loss on retirement should be reported in 2017 consolidated statements?   Select one: a. 2,000 loss b. 0 c. 4,000 loss d. 2,000 gain       2) The elimination and adjustment process for 2017 consolidated statements include: Select one: a. Credit Investment in Subsidiary Bond 102,000 b. Credit Interest Expense 8,000 c. Debit Interest Revenue 7,500 d. Credit Discount 500 Clear my choice

Well Co. has a $20,000 receivable from Eight Co. and a $40,000 receivable from Cotten Corporation. Well also has a $30,000 payable to Sloane Co. Well owns 80% of Eight, 45% of Cotten, and 55% of Sloane. Eight and Sloane are consolidated subsidiaries, and Cotten is an equity-basis investee. At what amounts should Well report these balances in the consolidated financial statements? Receivables Payables OA. $40,000 $0 ○ B. $30,000 $30,000 C. $60,000 $30,000 O D. $0 $0

Kent Ltd owns all of the shares of Lodh Ltd. In relation to the following intragrouptransactions, all parts of which are independent unless specified, prepare theconsolidation worksheet adjusting entries for preparation of the consolidated financialstatements as at 30 June 2020. Assume an income tax rate of 30%.  a. On 1 January 2020, Kent Ltd sold inventory costing $10,000 to Lodh Ltd at a transfer (sale) price $16,000. Lodh Ltd sold half of this inventory to an external party for $10,000 (i.e., half of the inventory is remained with Lodh Ltd at the end of the year).                                                                       b. During March 2018, Lodh Ltd paid a $5,500 interim dividend.                                        c. Kent Ltd rented a spare warehouse to Lodh Ltd. The total charge for the rental was $6,000. Lodh Ltd paid the whole amount to Kent Ltd during the year.                                                                            d. On 1 July 2019, Kent…

John Ltd, an ultimate parent reporting entity, holds a 25% interest in the voting shares of Wick Ltd. Equity accounting is applied to the interest held in Wick Ltd. During the second year since the date of the investment in the associate, inventory was sold from Wick Ltd to John Ltd at a selling price of $86,000. The cost of the inventory to Wick Ltd was $42,000. John Ltd held 30% of the inventory on hand at the end of the second year. Required: Prepare the appropriate consolidation adjusting journal required in the second year. (Show your workings

Powell Company owns an 80% interest in Sauter, Inc. On January 1, 2011, Sauter issued $400,000 of 10-year, 12% bonds at a premium of $50,000. On December 31, 2015, 5 years after original issuance, Powell purchased all of the outstanding bonds for $390,000. Both firms use the straight-line method of amortization.   The interest adjustment in the 2015 subsidiary income distribution schedule is ____. a. $2,000 b. $5,000 c. $4,500 d. $0

On January 2, Koo Company purchased a 25 percent interest in Poo Company for $240,000. On this date, the book value of Poo’s stockholders’ equity was $400,000. The carrying amounts of Poo’s identifiable net assets approximated fair values, except for land, whose fair value exceeded its carrying amount by $150,000. Poo reported net income of $100,000 and paid no dividends. Koo accounts for this investment using the equity method. In its December 31 balance sheet, what amount should Koo report for this investment? Question 4Answer a. $265,000 b. $280,000 c. $240,000 d. $210,000

SUB is a 90% owned subsidiary of PAR. SUB issued $100,000 of 8%, 5-year bonds for $96,110 on 1/1/2015, when the market rate was 9%. Annual interest is paid on 12/31/. PAR purchased the bonds on 1/1/2018, for $103,667, when the market rate was 6%. Both companies use the effective interest method to amortize the premium/discount on the bonds. 1/ How much gain or loss on retirement should be reported in 2018 consolidated statements? a. 3,667 loss b. 3,667 gain c. 5,427 loss d. 1,760 loss   2/ The net adjustment needed to consolidated income in the consolidation process for 2018 is: (hint: complete the subsidiary income distribution schedule and calculate the surplus of a gain or loss on retirement and the interest adjustment) a. 2,714 decrease b. 5,427 decrease c. 2,622 increase d. 2,805 decrease