Perview Incorporated owns 90% of Software Company. Software Company owns 70% of Bronston Company. Operational income figures for the current year are presented below, which contain noinvestment income. Included in Software's income is a $100,000 unrealized gain on intercompany transfers and Bronston's income is a $50,000 unrealized gain on intercompany transfers toPerview. Perview Incorporated Software Company Bronston Company Operational Income $ 600, 000 $ 450,000 $ 350,000 What is Perview Incorporated's realized income for the current year?Multiple Choice $1, 104, 000 $1, 100, 000 $1, 122, 000 $1, 176, 000 $1, 257,000

SOLUTION:Given Informationlet's the break down the information:To calculate Perview Incorporated's…

Answered: Perview Incorporated owns 90% of…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 3PA: Macon Mills is a division of Bolin Products. Inc. During the most recent year, Macon had a net...

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Portland Inc. (Portland) owns 80% of Seattle Inc. (Seattle) and uses the cost method to account for its investment. The 2023 income statements of both companies are shown below. Portland Seattle Gross profit $100,000 $50,000 Miscellaneous revenues (losses) (30,000) (20,000) Depreciation expense (20,000) (15,000) Income tax expense (20,000 (6,000) Net Income $30,000 $9,000 On January 1, 2023, Seattle acquired equipment for $7,000 and sold it the same day to Portland for $12,000. The equipment had a remaining useful life of 10 years on that date. Both companies are subject to an effective tax rate of 40%. Which of the following is the correct amount of consolidated net income attributable to the noncontrolling interest in Portland's 2023 consolidated income statement? Multiple Choice $2,340 $1,260 $1,200 $2,700
Alford Company and its 80 percent-owned subsidiary, Knight, have the following income statements for 2021: Knight $ (230,000) Alford $ (500,000) 300,000 40,000 140,000 10,000 20,000 20,000 (30,000) (36,200) $ (206, 200) Revenues Cost of goods sold Depreciation and amortization Other expenses Gain on sale of equipment Equity in earnings of Knight Net income 0 0 $ (60,000) Additional Information for 2021 • Intra-entity inventory transfers during the year amounted to $90,000. All intra-entity transfers were downstream from Alford to Knight. • Intra-entity gross profits in inventory at January 1 were $6,000, but at December 31, they are $9,000. • Annual excess amortization expense resulting from the acquisition is $11,000. • Knight paid dividends totaling $20,000. • The noncontrolling interest's share of the subsidiary's income is $9,800. . During the year, consolidated inventory rose by $11,000 while accounts receivable and accounts payable declined by $8,000 and $6,000, respectively. Net…
Tech Co. and Robotics Co. are joint venturers of Mecha Co., a producer of high tech machinery. Tech and Robotics, each have a 50% interest in the net assets of Mecha Co. During the year, Tech Co. earns revenue of P1,000,000 from its own operations while Mecha Co. reports revenue of P400,000. How much total revenue shall be reported in Tech Co.'s statement of profit or loss for the year?
P company owns 40% of S Corporation and During the year S had net income of 200000 and paid dividends of 50000, P used the cost method of accounting What effect would this have on the investment account and net income and retained earnings respectively? Select one: O a. understate, understate, understate O b. overstate, understate, understate O c. overstate, overstate, overstate O d. understate, overstate, overstate.
ABC Co. and XZY Corp .are joint operators in the development of DDD, an internet provider. Each join operator retains control over the assets contributed to the joint operation and share equally in the profits and losses of the join operation. During the year, ABC Co. earns revenue of P1,000,000 from its own operation. Sales of DDD amount to P800,000. How much total revenue shall be reported in ABC Co.’s statement of profit or loss or the year? 1,000,000 1,200,000 1,400,000 1,500,000
King's Road recently acquired all of Oxford Corporation's stock and is now consolidating the financial data of this new subsidiary. King's Road paid a total of $895,000 for Oxford, which has the following accounts: Fair Value $ 183,000 142,000 104,000 Tax Basis $ 183,000 142,000 104,000 Accounts receivable Inventory Land Buildings Equipment 234,000 235,000 (245,000) 190,000 184,000 (245,000) Liabilities Required: a. What amount of deferred tax liability arises in the acquisition? b. What amounts will be used to consolidate Oxford with King's Road at the date of acquisition? c. On a consolidated balance sheet prepared immediately after this takeover, how much goodwill should King's Road recognize? Assume a 21 percent effective tax rate.
Preparing a consolidated income statement For the year ended December 31, 20Y2, the operating results of Paley Corporation and its wholly owned subsidiary, Sims Enterprises, are as follows: Sales Cost of goods sold Gross profit Operating expenses Operating income Interest revenue Interest expense Net income Sales Paley Sims Corporation Enterprises 3,200,000 (1,900,000) 1,300,000 (750,000) 550,000 20,000 During 20Y2, Sims Enterprises sold and received payment of $80,000 for merchandise that was purchased by Paley Corporation. The merchandise sold to Paley cost Sims Enterprises $45,000. Paley Corporation sold the merchandise to another (nonaffiliated) company for $110,000. Cost of goods sold Gross profit a. Prepare a consolidated income statement for Paley Corporation and Subsidiary. Hint: Eliminate the effect of the intercompany sale. 570,000 Net income 900,000 (550,000) 350,000 (125,000) 225,000 Operating expenses Operating income Other revenue and expense: Interest revenue Interest…
Arriba and its 80 percent-owned subsidiary (Abajo) reported the following figures for the year ending December 31, 2021 (credit balances indicated by parentheses). Abajo paid dividends of $34,000 during this period. Abajo $(340,000) 158,800 68,000 Arriba $(680,000) 340,000 197,200 (27,200) Sales Cost of goods sold Operating expenses Dividend income Net income $(170,000) $(113,200) In 2020, intra-entity gross profits of $34,000 on upstream transfers of $102,000 were deferred into 2021. In 2021 intra-entity gross profits of $45,200 on upstream transfers of $124,400 were deferred into 2022. a. What amounts appear for each line in a consolidated income statement for the year ending December 31, 2021? b. What income tax expense should appear on the consolidated income statement if each company files a separate return? Assume that the tax rate is 21 percent.
The following is the presentation of ABC GMBH Profit and Loss and Other Comprehensive Income Statement for 20X9: Table Attached Additional information: 1. Part of the Surplus Revaluation of Fixed Assets Associated Entities is derived from XYZ GMBH in which ABC GMBH has an interest of 30%. 2. In Other Income (Expenses), there is Gain on Foreign Exchange, Rental Expenses and Finance Expenses. 3. Loss from Discontinued Operations occurred in 20X8 for one segment of the operation. 4. The weighted average number of shares outstanding during 20X9 and 20X8 is 100,000 shares. Questions: Identify of the presentation above that is not in accordance with the provisions in IFRS. Identify at least 5 items and explain the reasons.
King’s Road recently acquired all of Oxford Corporation’s stock and is now consolidating the financial data of this new subsidiary. King’s Road paid a total of $850,000 for Oxford, which has the following accounts: Fair value Tax Basis Accounts Receivable $153000 $153000 Inventory 141000 141000 Land 136000 136000 Buildings 276000 221000 Equipment 233000 160000 Liabilities (281000) (281000) a. What amount of deferred tax liability arises in the acquisition?b. What amounts will be used to consolidate Oxford with King’s Road at the date of acquisition?c. On a consolidated balance sheet prepared immediately after this takeover, how much goodwill should King’s Road recognize? Assume a 40 percent effective tax rate.
SquidGame Inc. presented the following information regarding its two divisions classified as investment centers. Operating Income Operating assets Net sales Jenny Division P 300,000 Johnny Division P500,000 2,500,000 1,200,000 1,500,000 240,000 2,750,000 Current Liabilities 375,000 WACC 15% 12.5% Current operating asset 500,000 750,000 The corporation is subject to a 35% tax rate. Weighted cost of capital is based on book value of long- term asset. Assuming the imputed interest rate is 18%. Required: 1. In using ROI, what is the ROI of the division that is performing better? 2. In using EVA, what is the EVA of the division that is performing better?
The Global Products Corporation has three subsidiaries. Sales Net income (after taxes) Assets Medical Supplies Heavy Machinery Electronics a-1. What is the return on sales for each subsidiary? Note: Input your answers as a percent rounded to 2 decimal places. O Medical Supplies O Electronics Medical Supplies Heavy Machinery $ 20,590,000 $5,140,000 1,830,000 19,900,000 a-2. Which subsidiary has the lowest return on sales? Heavy Machinery Return on Sales % % % Medical Supplies Heavy Machinery Electronics 697,000 8,450,000 b-1. What is the return on assets for each subsidiary? Note: Input your answers as a percent rounded to 2 decimal places. Return on Assets % % % Electronics $ 4,190,000 364,000 3,860,000

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