EBK ADVANCED FINANCIAL ACCOUNTING
12th Edition
ISBN: 9781260165104
Author: Christensen
Publisher: YUZU
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Chapter 7, Problem 7.15Q
To determine
Inter-Company Sale
Inter-Company Sale is referred toa transaction between two companies such as parent company and subsidiary company.
: The reason consolidation elimination differwhen the unrealized gain is related to intangible asset instead of tangible asset.
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Students have asked these similar questions
From a consolidated point of view, when should the profit be recognizedon intercompany sales of depreciable assets and non-depreciable assets?
Questions:
a. How much is the Goodwill/Gain on Bargain Purchase?
b. How much is the Consolidated Assets?
c.
In an acquisition where there is an exchange of assets for assets, how does the ownership structure of the acquiree change?
There is no change in the net assets
The net assets increase
The net assets decrease
The net assets may increase, decrease or remain the same.
Chapter 7 Solutions
EBK ADVANCED FINANCIAL ACCOUNTING
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Prob. 7.7QCh. 7 - Prob. 7.8QCh. 7 - Prob. 7.9QCh. 7 - Prob. 7.10Q
Ch. 7 - Prob. 7.11QCh. 7 - Prob. 7.12QCh. 7 - Prob. 7.13QCh. 7 - Prob. 7.14QCh. 7 - Prob. 7.15QCh. 7 - Prob. 7.16QCh. 7 - Prob. 7.17QCh. 7 - Prob. 7.18AQCh. 7 - Prob. 7.1CCh. 7 - Prob. 7.2CCh. 7 - Prob. 7.3CCh. 7 - Prob. 7.4CCh. 7 - Prob. 7.5CCh. 7 - Prob. 7.1.1ECh. 7 - Prob. 7.1.2ECh. 7 - Prob. 7.1.3ECh. 7 - Prob. 7.1.4ECh. 7 - Prob. 7.1.5ECh. 7 - Prob. 7.2.1ECh. 7 - Prob. 7.2.2ECh. 7 - Prob. 7.2.3ECh. 7 - Prob. 7.2.4ECh. 7 - Prob. 7.2.5ECh. 7 - Prob. 7.2.6ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.5ECh. 7 - Prob. 7.6ECh. 7 - Prob. 7.7ECh. 7 - Transfer of Depreciable Asset at Year-End Pitcher...Ch. 7 - Prob. 7.9ECh. 7 - Sale of Equipment to Subsidiary in Current Period...Ch. 7 - Prob. 7.11ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Prob. 7.15ECh. 7 - Prob. 7.16ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.20ECh. 7 - Prob. 7.21ECh. 7 - Prob. 7.22ECh. 7 - Prob. 7.23AECh. 7 - Prob. 7.24PCh. 7 - Prob. 7.25PCh. 7 - Prob. 7.26PCh. 7 - Prob. 7.27PCh. 7 - Prob. 7.28.1PCh. 7 - Prob. 7.28.2PCh. 7 - Prob. 7.28.3PCh. 7 - Prob. 7.28.4PCh. 7 - Prob. 7.29PCh. 7 - Prob. 7.30PCh. 7 - Prob. 7.31PCh. 7 - Prob. 7.32PCh. 7 - Prob. 7.33PCh. 7 - Prob. 7.34PCh. 7 - Prob. 7.35PCh. 7 - Prob. 7.37PCh. 7 - Prob. 7.38PCh. 7 - Prob. 7.41AP
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Similar questions
- In reference to the downstream or upstream sale of depreciable assets, which of the following statements is correct? A. Gains and losses appear in the parent-company accounts in the year of sale and must be eliminated by the parent company determining its investment income under equity method of accounting. B. The initial effect of unrealized gains and losses from downstream sales of depreciable asset is different from the sale of non-depreciable assets. C. Gains, but not losses, appear in the parent-company accounts in the year of sale and must be eliminated by the parent company in determining its investment income under the equity method of accounting. D. Upstream sales from the subsidiary to the parent company always result in unrealized gains or losses.arrow_forwardUnder what conditions is it appropriate for a businessto use the composite method of depreciation for itsplant assets? What are the advantages and disadvantagesof this method?arrow_forward(TCO E) What is the purpose of the adjustments to depreciation expense within the consolidated group when there has been an intra-entity transfer of a depreciable asset?arrow_forward
- In an acquisition where there is an exchange of assets for assets, how does the ownership structure of the acquiree change? A. The net assets decreaseB. The net assets may increase, decrease or remain the same.C. The net assets increaseD. There is no change in the net assetsarrow_forwardAccording to historical cost principle, the assets and liabilities should be reported (tick whichever apply)? a.At their market value b.At their cost of acquisition c.At their replacement value d.All of the abovearrow_forwardThe identifiable assets acquired and liabilities assumed in a business combination are generally measured at: a. Acquisition-date fair values b. Previous carrying amounts c. Fair value less cost to sell d. Costarrow_forward
- Which statement is correct regarding derecognition of financial assets? A. Transfer of risks and rewards is evaluated by determining the transferee’s ability to sell the asset. B. A sale and repurchase transaction where the repurchase price is a fixed price is a transfer of financial asset that qualifies for derecognition. C. The entity shall continue to recognize the transferred asset in its entirety if the transfer does not qualify for derecognition because the entity has retained substantially all the risks and rewards of ownership of the transferred asset. D. If an entity neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, the entity shall continue to recognize the transferred asset to the extent of its continuing involvement.arrow_forwardDuring the measurement period, which of the following may affect the amount ofgoodwill from business combination? A.New information regarding estimates in the contingent consideration that are not existing atthe date of acquisitionB.Nothing can affect the amount of goodwill.C.New information regarding estimates in the contingent consideration that are existing at thedate of acquisition.D.New information regarding estimates in the contingent considerationarrow_forwardWhy does an intra-entity sale of a depreciable asset (such as equipment or a building) require sub-sequent adjustments to depreciation expense within the consolidation process?arrow_forward
- At acquisition date the net assests of the acquired subsidairy are included in the consolidated financial statement at their acquisition date fair value. However most of the parent assets and liabilities are measured on an historical cost basis . Is this Consistent ? Explain.arrow_forwardWhat is the consolidated asset after acquisitionarrow_forwardIf an intangible asset is acquired as a part of the business combination it's recognised at: a. Fair value b. Cost c. Carring amount d. None of the given optionsarrow_forward
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