Question
In: Accounting
Simon Company owns 40% of the outstanding voting common stock of Nixon Corp. and has the...
Simon Company owns 40% of the outstanding voting common stock of Nixon Corp. and has the ability to significantly influence Nixon Corp.’s operations. During 2016 Simon had sold inventory costing $35,000 to Nixon for $50,000. All but 25% of that inventory had been sold to outsiders by Nixon Corp. by then end of fiscal year 2016. What amount of unrealized intra-entity inventory profit should be deferred by Simon Company in 2016? What is the journal entry that Simon company would make to record this deferral of profit? What journal entry does Simon Company make when the remaining inventory is sold in 2016?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
TCO A) Adelman Company owns 45% of the outstanding voting common stock of Craig Corp. and...
TCO A) Adelman Company owns 45% of the outstanding voting common
stock of Craig Corp. and has the ability to significantly influence
the investee's operations. On January 3, 20X1, the balance in the
Investment in Craig Corp. account was $462,000. Amortization
associated with this acquisition is $10,000 per year. During 20X1,
Craig earned a net income of $105,000 and paid cash dividends of
$20,000. Previously in 20X0, Craig had sold inventory costing
$28,000 to Adelman for $40,000. All but 20%...
X Corp. owns 98 of the 100 outstanding shares of T Corp. common stock the only...
X Corp. owns 98 of the 100 outstanding shares of T Corp. common
stock the only class outstanding. The other 2 shares are owned by
unrelated shareholders. T has some assets with both gains and
losses; assume the amount of the gains exceeds the amount of the
losses. In Year 1, X engages in the following transactions. On
March 1, it sells 30 shares of T stock to unrelated A for cash; on
April 1, it sells 10 shares of...
On January 2, 2021, Barley Corp. purchased 40% of the voting common stock of Wheat Co.,...
On January 2, 2021, Barley Corp. purchased 40% of the voting
common stock of Wheat Co., paying $3,000,000. Barley properly
accounts for this investment using the equity method. At the time
of the investment, Wheat’s total stockholders’ equity was
$5,000,000. Barley gathered the following information about Wheat’s
assets and liabilities whose book values and fair values
differed:
Book Value
Fair Value
Buildings (20-year life)
$
1,000,000
$
1,800,000
Equipment (5-year life)
1,500,000
2,000,000
Franchises (10-year life)
0
700,000
Any excess...
Starge Inc. owns 30% of the outstanding voting common stock of Ticker Co. and has the ability to significantly influence the investee's operations and decision making.
Starge Inc. owns 30% of the outstanding voting common stock of Ticker Co. and has the ability to significantly influence the investee's operations and decision making. On January 1,2018, the balance in the Investment in Ticker Co. account was $ 403,159. Amortization associated with this acquisition is $8,111 per year. During 2018, Ticker earned an income of $ 108,899 and paid cash dividends of $ 36,897. Previously in 2017, Ticker had sold inventory costing $ 28,988 to Starge for...
Harper, Inc. acquires 40 percent of the outstanding voting stock of Kinman Company on January 1,...
Harper, Inc. acquires 40 percent of the outstanding voting stock
of Kinman Company on January 1, 2017, for $334,900 in cash. The
book value of Kinman's net assets on that date was $625,000,
although one of the company's buildings, with a $70,800 carrying
amount, was actually worth $135,550. This building had a 10-year
remaining life. Kinman owned a royalty agreement with a 20-year
remaining life that was undervalued by $147,500. Kinman sold
inventory with an original cost of $77,700 to...
Harper, Inc. acquires 40 percent of the outstanding voting stock of Kinman Company on January 1,...
Harper, Inc. acquires 40 percent of the outstanding voting stock
of Kinman Company on January 1, 2017, for $210,000 in cash. The
book value of Kinman’s net assets on that date was $400,000,
although one of the company’s buildings, with a $60,000 carrying
amount, was actually worth $100,000. This building had a 10-year
remaining life. Kinman owned a royalty agreement with a 20-year
remaining life that was undervalued by $85,000.
Kinman sold inventory with an original cost of $60,000 to...
Harper, Inc. acquires 40 percent of the outstanding voting stock of Kinman Company on January 1,...
Harper, Inc. acquires 40 percent of the outstanding voting stock
of Kinman Company on January 1, 2017, for $320,500 in cash. The
book value of Kinman's net assets on that date was $620,000,
although one of the company's buildings, with a $78,400 carrying
amount, was actually worth $133,650. This building had a 10-year
remaining life. Kinman owned a royalty agreement with a 20-year
remaining life that was undervalued by $126,000. Kinman sold
inventory with an original cost of $79,800 to...
Harper, Inc., acquires 40 percent of the outstanding voting stock of Kinman Company on January 1,...
Harper, Inc., acquires 40 percent of the outstanding voting
stock of Kinman Company on January 1, 2020, for $345,900 in cash.
The book value of Kinman's net assets on that date was $675,000,
although one of the company's buildings, with a $63,600 carrying
amount, was actually worth $125,850. This building had a 10-year
remaining life. Kinman owned a royalty agreement with a 20-year
remaining life that was undervalued by $127,500.
Kinman sold inventory with an original cost of $69,300 to...
Harper, Inc. acquires 40 percent of the outstanding voting stock of Kinman Company on January 1,...
Harper, Inc. acquires 40 percent of the outstanding voting stock
of Kinman Company on January 1, 2017, for $341,100 in cash. The
book value of Kinman's net assets on that date was $655,000,
although one of the company's buildings, with a $65,200 carrying
amount, was actually worth $125,450. This building had a 10-year
remaining life. Kinman owned a royalty agreement with a 20-year
remaining life that was undervalued by $137,500. Kinman sold
inventory with an original cost of $107,100 to...
Lewis Company owns 75% of the voting common stock of Bosch, Inc. On January 1, 2015,...
Lewis Company owns 75% of the voting common stock of Bosch, Inc.
On January 1, 2015, Bosch sold $1,400,000 in ten-year bonds to the
public at 105. The bonds pay a 10% interest rate every December 31.
Lewis Company acquired 40% of these bonds on January 1, 2017, for
95% of the face value. Both companies utilizes the straight-line
method of amortization.
What consolidation entry would be recorded in connection with
these intra-entity bonds on December 31, 2017?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Discuss the difference between a)FAT, FAT32, NTFS, CDFS, etc., b)What make them diferent and why they...
- 2. Given the Instruction sets for Machine-1, Machine-2 and Machine-3, write programs to calculate: P= ((B×C)...
- Problem III. Suppose that, in a market of a certain good, there are firms that are...
- discusses the difference between public relations and advertising. Cite an organization or individual and give one...
- Draw a sketch for the Hydrogen (discrete) spectrum, labeling the lines according to their respective quantum...
- Create a program/function using PYTHON that takes cents and returns to the customer how MANY coins...
- You have been asked to design an elevator system. The functions of an elevator includes moving...
ADVERTISEMENT