Topic: Intercompany Profits (Sale of Merchandise, Land and Depreciable Assets)Problem:Dia Corp. acquired a 70% interest in Rubie Co. in 2021. For the year ended December31, 2021 and 2022, Rubie Co reported net income of P160,000 and P180,000,respectively. During 2021, Rubie sold merchandise to Dia Corp. for P20,000 at a profitof P4,000. The merchandise was later resold by Dia Corp. to outsider for P30,000during 2022.Required:• For consolidation purposes, what is the non-controlling interest's share ofRoom's net income for 2021.•For consolidation purposes, what is the non-controlling interest's share ofRoom's net income for 2022.

When the goods are sold by subsidiary to parent or parent to subsidiary, it is known as intercompany…

Answered: Problem: Dia Corp. acquired a 70%…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Cebu Company reported a retained earnings balance of P5,000,000 at January 1, 2020. In August 2020, Cebu determined that insurance premiums of P600,000 for the three-year period beginning January 1, 2019, had been paid and fully expensed in 2019. Cebu has a 30% income tax rate. What amount should Cebu report as adjusted beginning retained earnings in 2020? Kentucky Enterprises purchased a machine on January 2, 2019, at a cost of P120,000. An additional P50,0 was spent for installation, but this amount was charged erroneously to repairs expense. The machine has a useful life of five years and a residual amount of P20,000. As a result of the error, Retained earnings at December 31, 2020, was understated by P38,000 and 2020 income was overstated by P6,000. O Retained earnings at December 31, 2020, was understated by P30,000 and 2020 income was overstated by P10,000. O Retained earnings at December 31, 2020, was understated by P30,000 and 2020 income was overstated by P6,000. 2019 income…
15. Northridge, Inc., buys 40% of Matador Company on January 1, 2019. for $550,000. The equity method of accounting is to be used, Matador's net assets on that date were $1.2 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Matador immediately begins supplying inventory to Northridge as follows: Amount Held by Northridge Year Cost to Matador Transfer Price At Year End (at transfer price)2019 $70,000 $100,000 $25,0002020 $96,000 $150,000 $45,000Inventory held at the end of one year by Northridge is sold at the beginning of the next. Matador reports net income of $100,000 in 2019 and $150.000 in 2020 and declares (and pays)…
Excelsior Corporation has the following headings on its December 31, 2019 Balance Sheet: Total Current Assets $200,000 Total Assets $500,000 Total Current Liabilities $169,000 Total Non Current Liabilities $300,000 On January 2020 Excelsior sells temporary investments to pay off $56,400 in long term debt Required 1: How much will working capital increase (decrease) by when comparing December 2019 with January 2020? Required 2: If no other transaction took place in January 2020, the current ratio at the end of January 2020 is: Required 3: If no other transaction took place in January 2020, the debt to equity ratio at the end of January 2020 is: Required 4: If no other transaction took place in January 2020, the financial leverage in January 2020 is (calculate the Equity Ratio and not the Equity Ratio percentage): Required 5: If last 12 month sales as of January 2020 amount to $480,000, the working capital turnover for the period ended January 31st 2020 is:
During 2019, Parent Company sold goods costing $ 21,000 to its subsidiary, Synergy, at a gross profit of 30%. Synergy had none of this inventory on hand at the end of 2019. What is the value of Sales? Select one: O a. 26,000 O b. 25,000 O c. 26,250 O d. 30,000
Camille, Incorporated, sold $147,000 in inventory to Eckerle Company during 2023 for $245,000. Eckerle resold $109,000 of this merchandise in 2023 with the remainder to be disposed of during 2024. Required: Assuming that Camille owns 34 percent of Eckerle and applies the equity method, what journal entry is recorded at the end of 2023 to defer the intra-entity gross profit? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. 1.Record the entry at the end of 2023 to defer unrealized gross profit.
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Bridgeport Inc. enters into an agreement on March 1, 2020, to sell Werner Metal Company aluminum ingots. As part of the agreement, Bridgeport also agrees to repurchase the ingots on May 1, 2020, at the original sales price of $190,000 plus 3%. (a) Prepare Bridgeport's journal entry necessary on March 1, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles ancienter O for the amounts.) Account Titles and Explanation eTextbook and Media List of Accounts Debit Credit
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PKT Ltd wanted to achieve a 25% GP for each sale completed. Inventory sales between AB and CFLtd amounted to R1875 000 for the year ended 31 December 2022. Inventory on hand in CF Ltd previouslypurchased from PKT Ltd: R620 000 (31 December 2022) R750 000 (31 December 2021)Prepare the journal entries (with narrations) for the year ended 31 December 2022. Assume a tax rate of30%.
In 2024, Banchero Corp. changed from a FIFO cost flow assumption to average cost flow assumption for inventory valuation in financial reporting. Banchero's tax rate is 20%, and Banchero has used, and will continue to use FIFO for tax reporting purposes. Below is a summary of cost of goods sold, as calculated under both methods, for Banchero's first three years of operations. 2022 2023 2024 FIFO COGS $205,100 $228,700 $226,400 Average cost COGS $236,800 $223,100 $258,700 Implementing the accounting change in 2024 will require a debit (enter as a positive number) or a credit (enter as a negative number) to retained earnings for what amount?
Required: a. Determine the maturity dates of the March 1 and November 1 notes. Date of Note Maturity Date March 1 November 1

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