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Several years ago, Sammy Inc. acquired a 709% interest in Lavender Co. The book values of Lavender's asset and liability accounts at that time were considered to be equal to their fair valoes. Sammy's acquisition value corresponded to the underlying book value of Lavender so that no allocations or goodwill resulted from the transfer. The following selected account balances were from the individual financial records of these two compenies as of December 31, 2022: Sammy Lavender $424,000 $249,000 Sales Cost of goods 158.000 103,000 sold 80,000 36,000 Operating expenses Inventory Building (net) Investment 125,000 520,000 not given 96.000 180,000 income Assume that Lavender sold inventory to Samny at a 20% gross profit rate. Intra-entity transfers were $60,000 in 2021 and $80,000 in 2022. Of this inyentory, $15.000 of the 2021 transfers were retained and then sold by Sammy in 2022, whereas $25,000 of the 2022 transfers were beld until 2023. Sammy sold a bailding to Lavender on January 1, 2021 for $76,000, although the book value of this asset was only $40,000 on that date. The building had a six-year remaining useful life and was to be depreciated using the straight-line method with no savago value. Answor the followng questions (Do not add dollar sign, do not add comma to your amount; round the answer to the whole numbor) A. Determine the amount of intra-entity profit remains in Sammy's inventory at the end of 2021. 2. Determine the amount of intra entity profit remains in Sammy's inventory at the end of 2022. 3. Determine the consolidated balance of cost of goods sold for 2022. ADesermine the consolidated balance of inventory for 2022

Several years ago, Sammy Inc. acquired a 709% interest in Lavender Co. The book values of Lavender's asset and liability accounts at that time were considered to be equal to their fair valoes. Sammy's acquisition value corresponded to the underlying book value of Lavender so that no allocations or goodwill resulted from the transfer. The following selected account balances were from the individual financial records of these two compenies as of December 31, 2022: Sammy Lavender $424,000 $249,000 Sales Cost of goods 158.000 103,000 sold 80,000 36,000 Operating expenses Inventory Building (net) Investment 125,000 520,000 not given 96.000 180,000 income Assume that Lavender sold inventory to Samny at a 20% gross profit rate. Intra-entity transfers were $60,000 in 2021 and $80,000 in 2022. Of this inyentory, $15.000 of the 2021 transfers were retained and then sold by Sammy in 2022, whereas $25,000 of the 2022 transfers were beld until 2023. Sammy sold a bailding to Lavender on January 1, 2021 for $76,000, although the book value of this asset was only $40,000 on that date. The building had a six-year remaining useful life and was to be depreciated using the straight-line method with no savago value. Answor the followng questions (Do not add dollar sign, do not add comma to your amount; round the answer to the whole numbor) A. Determine the amount of intra-entity profit remains in Sammy's inventory at the end of 2021. 2. Determine the amount of intra entity profit remains in Sammy's inventory at the end of 2022. 3. Determine the consolidated balance of cost of goods sold for 2022. ADesermine the consolidated balance of inventory for 2022

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Several years ago, Sammy Inc. acquired a 70% interest in Lavender Co. The book values of Lavender's asset and liability accounts at that time were considered to be equal to their fair values. Sammy's acquisition value corresponded to the underlying book value of Lavender so that no allocations or goodwill resulted from the transfer. The following selected account balances were from the individual financial records of these two companies as of December 31, 2022: Sammy Lavender $424,000 $249,000 Sales Cost of goods sold 158,000 103,000 80,000 36,000 Operating cxpenses Inventory Building (net) Investment income 125,000 520,000 not given 96,000 180,000 Assume that Laender sold inventory to Sammy at a 20% gross profit rate. Intra-entity transfers were $60,000 in 2021 and $80,000 in 2022. Of this inventory, S15,000 of the 2021 transfers were retained and thcn sold by Sammy in 2022, whbereas $25,000 of the 2022 transfers were held until 2023. Sammy sold a bailding to Lavender on January 1, 2021 for $76,000, although the book value of this asset was only $40,000 on that date. The building had a six-year remaining useful life and was to be depreciated using the straight-line method with no salvage value. Answor the following questions: (Do not add dollar sign; do not add comma to your amount; round the answor to the whole number) A. Determine the amount of intra-entity profit remains in Sammy's inventory at the end of 2021. 2 Determine the amount of intra-entity profit remains in Sammy's inventory at the end of 2022. 3. Determine the consolidated balance of cost of zoods sold for 2022. ADetermine thbe consolidated balance of inventory for 2022
Transcribed Image Text:Several years ago, Sammy Inc. acquired a 70% interest in Lavender Co. The book values of Lavender's asset and liability accounts at that time were considered to be equal to their fair values. Sammy's acquisition value corresponded to the underlying book value of Lavender so that no allocations or goodwill resulted from the transfer. The following selected account balances were from the individual financial records of these two companies as of December 31, 2022: Sammy Lavender $424,000 $249,000 Sales Cost of goods sold 158,000 103,000 80,000 36,000 Operating cxpenses Inventory Building (net) Investment income 125,000 520,000 not given 96,000 180,000 Assume that Laender sold inventory to Sammy at a 20% gross profit rate. Intra-entity transfers were $60,000 in 2021 and $80,000 in 2022. Of this inventory, S15,000 of the 2021 transfers were retained and thcn sold by Sammy in 2022, whbereas $25,000 of the 2022 transfers were held until 2023. Sammy sold a bailding to Lavender on January 1, 2021 for $76,000, although the book value of this asset was only $40,000 on that date. The building had a six-year remaining useful life and was to be depreciated using the straight-line method with no salvage value. Answor the following questions: (Do not add dollar sign; do not add comma to your amount; round the answor to the whole number) A. Determine the amount of intra-entity profit remains in Sammy's inventory at the end of 2021. 2 Determine the amount of intra-entity profit remains in Sammy's inventory at the end of 2022. 3. Determine the consolidated balance of cost of zoods sold for 2022. ADetermine thbe consolidated balance of inventory for 2022
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