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Part B Boromir Ltd owns 100% of Samwise Ltd, which in turn owns 100% of Saruman Ltd.   During the financial reporting period, Boromir Ltd sells inventory to Samwise Ltd at a sales price of $350,000, which cost Boromir Ltd $200,000 to produce. Samwise Ltd subsequently sells the same inventory to Saruman Ltd for $400,000 without incurring any additional costs.   By the end of the financial reporting period, Saruman Ltd has sold half of this inventory to companies outside the group for $450,000, and kept the remining half of the inventory on hand.       Required: a) From the economic entity’s perspective (ie. the group’s perspective), determine the sales revenue for the financial reporting period, and explain your answer. Type your answer here                   b) From the economic entity’s perspective (ie. the group’s perspective), determine the value of closing inventory for the financial reporting period, and explain your answer. Type your answer here

Tanton plc is the parent company of Ruckus plc. Tanton sold its inventory to Ruckus for a price of £14,000. Tanton had held such inventory on its statement of financial position at a cost of £10,000. By the end of the financial year, Ruckus still held £2,800 of that inventory on its statement of financial position. How much unrealised profit should be cancelled on consolidation?   a. Zero b. £400 c. £800 d. £2,800 e. £4,000

Q Ltd., a Canadian corporation, owns 100% of the shares of R Ltd. The R shares have an ACB of $110,000 and are now worth $230,000. R's only asset is land having a cost of $80,000 and a current value of $230,000. The land was worth $110,000 when Q purchased R's shares. Both corporations have September 30 year-ends. On October 31 R is wound up into Q. What is the ACB of the land in Q after the wind-up? $ 80000

On January 1, 20X8, Pace Company acquired all of the outstanding stock of Spin PLC, a British Company, for $350,000. Spin's net assets on the date of acquisition were 250,000 pounds (£). On January 1, 20X8, the book and fair values of the Spin's identifiable assets and liabilitie approximated their fair values except for equipment. The remaining useful life of Spin's equipment at January 1, 20X8, was 10 years. During 20X8, Spin earned 60,000 pounds in income and declared and paid 10,000 pounds in dividends. The dividends were declared and paid in pounds on November 1, 20X8. Pace's income from its own operations was $150,000 for 20X8. Pace's total stockholders' equity on January 1, 20X8 was $1,000,000. It declared $50,000 of dividends during 20X8. Assume Pace uses the fully adjusted equity method to account for its investment in Spin. Management has determined that the pound is Spin's appropriate functional currency. Relevant exchange rates were as follows: January 1, 20X8 November 1,…

Par Corporation, a Canadian company, purchased 80% of the outstanding shares of Sub Company of Germany on December 31, Year 5 for €3,000,000 Euros. At that date, the carrying values of Sub’s assets and liabilities were equal to fair values. There was a goodwill impairment loss in Year 6 of €10,000. The fiscal Year 5 financial statements of Sub were as follows: Sub Company Balance Sheet December 31, Year 5 Cash € 500,000 Accounts receivable 900,000 Inventory 1,200,000 Capital assets (net) 3,250,000 € 5,850,000 Accounts payable € 650,000 Bonds payable 1,700,000 Common shares 2,000,000 Retained earnings 1,500,000 € 5,850,000 Par anticipated that there would be a high volume of intercompany transactions with Sub, because Par provides the raw materials to Sub and sales are global. Also Sub obtained most of its financing thru banks in Canada. Par uses the cost method to account for its investment in Sub. The fiscal Year 6 financial statements of Par and Sub were as follows: Balance Sheets…

Subject: accounting

Breslin Incorporated made a capital contribution of investment property to its 100-percent-owned subsidiary, Crisler Company. The investment property had a fair market value of $3,000,000 and a tax basis to Breslin of $2,225,000. b. What is the tax basis of the investment property to Crisler Company after the contribution to capital?

Hoolia Corporation acquires equipment and patents from another company for $50 million and records the acquisition as an asset acquisition. The equipment has a fair value of $19.20 million and the patents have a fair value of $28.80 million. Neither asset is nonqualifying. At what value does Hoolia record the equipment? Select one: a. $25.0 million b. $20.0 million c. $21.2 million d. $19.2 million

A U.S. company owns an 80% interest in a company located on Mars. Martian currency is called the Martian Credit. During the year the parent company sold inventory that had cost $24,000 to the subsidiary on account for $30,800 when the exchange rate was $0.5192. The subsidiary still held one-half of the inventory and had not paid the parent company for the purchase at the end of the fiscal period. The unsettled account is denominated in dollars. The exchange rate at the fiscal year-end was $0.4994. Assuming that the transaction had been denominated in 47,004 Martian Credits rather than dollars, compute the transaction gain or loss that would be reported by the parent company.