Q. XYZ Company owns 80% of Emerald and Emerald owns 90% of Sapphire, Inc. Separate operating income totals for the current year follow; they contain no investment income. None of these acquisitions required amortization expense. Included in Sapphire’s income is a $27,000 unrealized gain on intra-entity transfers to Emerald. XYZ Emerald Sapphire Separate operating income $ 323,000 $ 249,000 $ 231,000 What is XYZ’s accrual-based net income for the year?
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Q.
XYZ Company owns 80% of Emerald and Emerald owns 90% of Sapphire, Inc. Separate operating income totals for the current year follow; they contain no investment income. None of these acquisitions required amortization expense. Included in Sapphire’s income is a $27,000 unrealized gain on intra-entity transfers to Emerald. XYZ Emerald Sapphire Separate operating income $ 323,000 $ 249,000 $ 231,000 What is XYZ’s accrual-based net income for the year?
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- Diamond Company owns 80 percent of Emerald and Emerald owns 90 percent of Sapphire, Inc. Separate operating income totals for the current year follow; they contain no investment income. None of these acquisitions required amortization expense. Included in Sapphire’s income is a $50,000 intra-entity gain on transfers to Emerald still in Emerald’s possession.What is Diamond’s accrual-based net income for the year?a. $658,400b. $674,400c. $666,800d. $645,600Hardford Corp. held 80% of Inglestone Inc., which, in turn, owned 80% of Jade Co. Excess amortization expense was not required by any of these acquisitions. Separate net income figures (without investment income) as well as upstream intra-entity gross profits (before deferral) included in the income for the current year follow: Hardford Corp. Inglestone Inc. Jade Co. Separate net income $560,000 $420,000 Intra-entity gross profits 70,000 42,000 The net income attributable to the noncontrolling interest of Inglestone Inc. is calculated to be Multiple Choice $114,530. $106,960. $103,680. $102,640. $106,950.Diamond Company owns 80 percent of Emerald and Emerald owns 90 percent of Sapphire, Inc. Separate operating income totals for the current year follow; they contain no investment income. None of these acquisitions required amortization expense. Included in Sapphire's income is a $36,000 intra-entity gain on transfers to Emerald still in Emerald's possession. Diamond Emerald Sapphire Separate operating income $397,000 $270,000 $230,000 What is Diamond's accrual-based net income for the year?
- Choose the correct.Diamond Company owns 80 percent of Emerald and Emerald owns 90 percent of Sapphire, Inc. Separate operating income totals for the current year follow; they contain no investment income. None of these acquisitions required amortization expense. Included in Sapphire’s income is a $50,000 intra-entity gain on transfers to Emerald still in Emerald’s possession. Diamond Emerald Sapphire Separate operating income $348000 $228000 $21000 What is Diamond’s accrual-based net income for the year?a. $658,400b. $674,400c. $666,800d. $645,600Sontag Corporation’s net assets have fair values as described below. Fair Value Current assets $250,000 Land 800,000 Buildings and equipment 1,000,000 Loans payable (300,000) The Pratt Company pays $3,000,000 for Sontag Corporation, and records the acquisition as a merger. Pratt Company determines that identifiable intangibles valued at $1,500,000, not previously reported on Sontag’s books, also are recognized as acquired assets. Required a. Prepare a schedule to calculate the gain on acquisition. Use a negative sign with any answer that reduces the fair value of net assets (left column only). Price paid Answer Fair value of identifiable net assets: Current assets 250,000 Land Answer Buildings and equipment Answer Identifiable intangibles Answer Loans payable Answer Answer Gain on acquisition AnswerRichard Company purchased 20% of Cliff Company for P3,000,000 during the current year. This investment did not give Richard Company the ability to exercise significant influence over Cliff Company. During the year, Cliff Company reported net income of P3,500,000 and paid cash dividends of P4,000,000. What is the carrying amount of the investment in Cliff Company ot the end of the current year? o a.2.200,000 O b.2,900,000 O .3,000,000 o d. 3,700,000
- Sing Company, a 80% owned subsidiary of Paint Corp., reported net income of P1,500,000 and paid dividends totaling P500,000 during Year 1. Amortization of the excess fair values over book values of identifiable net assets on the date of acquisition amounted to P220,000. What is the amount of non-controlling interest in consolidated net income of Sing in Year 1? A. P156,000 B. P256,000 C. P100,000 D. P56,000On January 1, 20X1 P Co acquired 70% ownership of S Ltd. On the acquisition date all identifiable assets and liabilities had book values equal to fair values. P uses the cost method to record its investment in S. For external reporting purposes consolidated statements are required. However, the purchase did result in the acquisition of goodwill of $55,000. During the past few years, a number of transactions have taken place: Inter-company downstream sales during 20X5 were 120,000. An unrealized profit of 17,000 still remains in the unsold ending inventory. The beginning inventory included an unrealized profit of 11,000 related to last year’s downstream inter-company sales. Inter-company upstream sales during 20X5 were 70,000. An unrealized profit of 8,000 remains in the unsold ending inventory. There were no inter-company upstream sales last year. On January 3, 20X3, P sold equipment to S for 88,000. The equipment had a net book value of $60,000 and a remaining useful life of 10…A parent company purchased an 80% interest in its subsidiary several years ago with no AAP (i.e., purchased at book value). Each reports the following income statement for the current year. Parent Subsidiary Income statement: Sales $25,000,000 $3,750,000 17,500,000 2,250,000 Cost of goods sold Gross profit 7,500,000 1,500,000 Income (loss) from subsidiary 420,000 0 Operating expenses 4,750,000 975,000 Net income $3,170,000 $525,000 a. Compute the Income (loss) from subsidiary of $420,000 reported by the parent company. 0 0 % Income (loss) from subsidiary $ 0 b. Prepare the consolidated income statement for the current year. Do not use negative signs with your answers. Consolidated Income Statement Sales 0 Cost of goods sold 0 Gross profit 0 Income (loss) from subsidiary 0 Operating expenses 0 ♦ 0 0 + $ 0 of the qunction
- Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2021, the companies had the following account balances: Akron Toledo Sales $ 1,100,000 $ 600,000 Cost of goods sold 500,000 400,000 Operating expenses 400,000 220,000 Investment income Not given 0 Dividends declared 80,000 30,000 Intra-entity sales of $320,000 occurred during 2020 and again in 2021. This merchandise cost $240,000 each year. Of the total transfers, $70,000 was still held on December 31, 2020, with $50,000 unsold on December 31, 2021. Prepare a consolidated income statement for the year ending December 31, 2021.ABC Corporation acquired 70 percent of XYZ Corporation on August 1 for P420,000. On that date, XYZ Corporation had the following book values and market values. What is the amount of purchase differential recognized on the acquisition date consolidated balance sheet with respect to plant assets. *In good accounting form, please. Thank you!Phelps Co. uses the sophisticated equity method to account for the 80% investment in its subsidiary Shore Corp. At the time of the acquisition, the fair values of the net asset required approximated their book values. Based upon the following information, what is consolidated net income? Phelps internally generated income: $250,000 Shore internally generated income: $ 50,000 Intercompany profit on Shore beginning inventory: $ 10,000 Intercompany profit on Shore ending inventory: $ 15,000 a. $300,000 b. $295,000 c. $286,000 d. $305,000