Pabari Corporation owns an 80% interest in Alders Corporation and Alders owns a 60% interest in Babao Corporation. Both interests were acquired at a cost equal to book value equal to fair value. During 2013, Alders sells land to Babao at a profit of $12,000. Babao still holds the land at December 31, 2013, Net income(loss) of the three companies (excluding investment income) for 2013 are: Pabari Corporation Alders Corporation Babao Corporation Controlling interest share of consolidated net income and noncontrolling interest share, respectively, for 2013 are $211,200 and ($1,200). $180,000 $72,000 $(30,000) $211,200 and ($3,600). $213,600 and ($1,200). O $213,600 and ($3,600).
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- Pogo Corporation acquired a 75% interest in Sperry Corporation on January 1, 2011 at a cost equal to book value and fair value. In the same year Sperry sold land costing $25,000 to Pogo for $50,000. On July 1, 2014, Pogo sold the land to an unrelated party for $85,000. What was the gain on the sale of the land on the consolidated income statement for 2014? A. $25,000 B. $35,000 C. $60,000 D. $45,000Pabari Corporation owns an 80% interest in Alders Corporation and Alders owns a 60% interest in Babao Corporation. Both interests were acquired at a cost equal to book value equal to fair value. During 2013, Alders sells land to Babao at a profit of $12,000. Babao still holds the land at December 31, 2013. Net income (loss) of the three companies (excluding investment income) for 2013 are: Pabari $180,000 Alders 72,000 Babao (30,000)Controlling interest share of consolidated net income and noncontrolling interest share, respectively, for 2013 are Select one: a.$213,600 and ($1,200). b.$213,600 and ($3,600). c.$211,200 and ($1,200). d.$211,200 and ($3,600).Pineburst Inc. acquired an 80% interest in Smallwood Company in January 1, 2003, for an amount equal to book value. Smallwood sold land to Pineburst in 2003 at a profit of $5,000. The land is held by the buying affiliate firm until 2005, when it is sold to an unaffiliated party for a profit of $6,000. Smallwood reported net income for 2003, 2004, and 2005 of $30,000, $40,000, and $50,000, respectively. Assume that the 2003 intercompany transfer of land was upstream from Smallwood to Pinehurst. Prepare the consolidation worksheet adjustment journal entry on December 31, 2005, concerning the intercompany sale of land
- P Company acquired an 80% interest in S Company on January 1, 2011, for an amount equal to book value. S Company sold land to P Company in 2011 at a profit of P5,000. The land is held by the buying affiliate firm until 2013, when it is sold to an unaffiliated party for a profit of P6,000. S Company reported net income for 2011, 2012, and 2013 of P30,000, P40,000 and P50,000, respectively. 1. The parent’s investment income for 2011 would be: 2. The 2013 consolidated income statement would reflect a gain on sale of land in the amount of 3. The WPEE on December 31, 2013, concerning the intercompany sale of land would include:Goku Corporation is an 80% owns subsidiary of Vegeta Corporation. In 2018, Goku sold land net cost of P30,000 to Vegeta for P50,000. Vegeta held the land for 8 years before selling it in 2019 to Frieza Company, an unrelated entity, for P110,000. The consolidated income statement of Vegeta and its subsidiary in 2019, Goku, will show a gain on the sale of land of: A. 32,000 B. 48,000 C. 80,000 D. 60,000On January 1, 2011 Bullock, Inc. sells land to its 80%-owned subsidiary, Humphrey Corporation, at a $20,000 gain. The land is sold by Humphrey to an outside party in 2013. What is the effect of the intercompany sale of land on 2011 consolidated net income? Select one: a.Consolidated net income will be $20,000 greater than it would have been had the sale not occurred. b.Consolidated net income will be $16,000 less than it would have been had the sale not occurred. c.Consolidated net income will be $20,000 less than it would have been had the sale not occurred. d.Consolidated net income will be the same as it would have been had the sale not occurred.
- Pied Imperial Corporation acquired a 90% interest in Somest Corporation in 2012 when Somest's book values were equivalent to fair values. Somest sold equipment with a book value of $80,000 to Pied for $130,000 on January 1, 2014. Pied is fully depreciating the equipment over a 4-year period by using the straight-line method. Somest reported net income for 2014 was $320,000. Pied's 2014 income from Somest was A. $254,250. B. $288,000. C. $249,250. D. $250,500.Fishing Tours Ltd. is a 75% owned subsidiary of Boat Rentals Ltd. On January 1, 2012, Fishing Tours sold a boat to Boat Rentals Ltd. for $80,000, recognizing a gain of $30,000. Boat Rentals depreciated the boat on a straight-line basis over five years. On July 1st, 2015, Boat Rentals Ltd. sold the boat to an unaffiliated company for $55,000. Assume a 40% corporate tax rate. Required: Prepare the appropriate consolidation adjustments relating to the boat for December 31, 2015.Barney Company is an 80% owned subsidiary Hayes Inc. During 20X2, Hayes sold land to Barney for $60,000. Based upon an independent appraisal of the land's value. The land originally cost $40,000. On July 1, 20X2, Barney sold machinery to Hayes for $20,000. The machinery was carried on Barney's books at a $30,000 cost, with accumulated depreciation of $17,000. The machinery had a remaining life of 5 years at the sale date. Both companies use the straight line method depreciation. Instructions: Complete the following partial worksheet for 20X3, the year subsequent to the asset sales. Key and explain all eliminations and adjustments. Hayes Inc, and Subsidiary Barney Company Partial Worksheet For the Year Ended December 31, 20X8
- Pigeon Corporation purchased land from its 60%-owned subsidiary, Seed Inc., in 2012 at a cost $50,000 greater than Seed's book value. In 2014, Pigeon sold the land to an outside entity for $20,000 more than Pigeon's book value. The 2014 consolidated income statement should report a gain on the sale of land of A. $70,000. B. $12,000. C. $42,000. D. $20,000.Parent purchases Land on January 1, 2009 for $100,000. On January 1, 2010 parent sells land to 100% owned subsidiary for $140,000. Subsiriary holds land until December 31, 2014 and thensells it to a third parties for $160,000. How much gain does the sudsidiary record on the books in 2014? How much is consolidated gain on sale of land in 2014? how much is debited to retained earnings in 2014? thank youOn January 1, 2016, Cameron Inc. bought 20% of the outstanding common stock of Lake Construction Company for $300 million cash. At the date of acquisition of the stock, Lake’s net assets had a fair value of $900 million. Their book value was $800 million. The difference was attributable to the fair value of Lake’s buildings and its land exceeding book value, each accounting for one-half of the difference. Lake’s net income for the year ended December 31, 2016, was $150 million. During 2016, Lake declared and paid cash dividends of $30 million. The buildings have a remaining life of 10 years. Required: 1. Prepare all appropriate journal entries related to the investment during 2016, assuming Cameron accounts for this investment by the equity method. 2. Determine the amounts to be reported by Cameron: a. As an investment in Cameron’s 2016 balance sheet. b. As investment revenue in the income statement. c. Among investing activities in the statement of cash flows.