Question 1

What is the total of consolidated operating expenses?

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Question 2

Dalton Corp.owned 70% of the outstanding common stock of Shrugs Inc.On January 1, 2016, Dalton acquired a building with a ten-year life for $420,000.No salvage value was anticipated and the building was to be depreciated on the straight-line basis.On January 1, 2018, Dalton sold this building to Shrugs for $392,000.At that time, the building had a remaining life of eight years but still no expected salvage value.For consolidation purposes, what is the Excess Depreciation (ED entry) for this building for 2018?

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Question 3

In the consolidation worksheet for 2017, which of the following accounts would be debited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

Accepted Answer

Unrecognized intra-entity gross profit arises when goods are transferred between entities within the same company at a price different from their cost. Cost of goods sold is debited in the consolidation worksheet to eliminate the gross profit, thereby ensuring that the financial statements reflect only external transactions.

Question 4

In the consolidation worksheet for 2018, which of the following accounts would be debited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

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Question 5

In the consolidation worksheet for 2018, which of the following accounts would be credited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

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Question 6

In the consolidation worksheet for 2018, assuming Carter uses the initial value method of accounting for its investment in Strickland, which of the following accounts would be credited to defer recognition of intra-entity gross profit with regard to the 2017 intra-entity transfers?

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Question 7

What is the consolidated total for inventory at December 31, 2018?

Accepted Answer

The consolidated total for inventory at December 31, 2018 can be found by adding the inventory of Subsidiary A ($128,000) and the inventory of Subsidiary B ($224,000) and subtracting the intercompany inventory transfer of $4,800. This gives us a total of $347,200 (128,000 + 224,000 - 4,800). Therefore, the best choice is D.

Question 8

In the consolidation worksheet for 2017, which of the following accounts would be credited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

Accepted Answer

The correct account that needs to be credited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers is the inventory account because it is the account that is affected by the intra-entity transfers, and crediting it will eliminate the gross profit arising from these transfers. The other accounts listed are not directly impacted by the intra-entity transfers and do not relate to the elimination of intra-entity gross profit.

Question 9

In the consolidation worksheet for 2017, which of the following accounts would be debited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

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Question 10

Included in the amounts for Pot's sales were Pot's sales for merchandise to Skillet for $140,000.There were no sales from Skillet to Pot.Intra-entity transfers had the same markup as sales to outsiders.Skillet had resold all of the intra-entity transfers (purchases) from Pot to outside parties during 2018.What are consolidated sales and cost of goods sold for 2018?

Accepted Answer

The intra-entity sales of $140,000 should be eliminated from the consolidated sales, resulting in $1,400,000. Since Skillet resold all the intra-entity purchases, the cost of goods sold remains unaffected by the intra-entity markup, resulting in $952,000.

Question 11

In the consolidation worksheet for 2018, assuming Carter uses the initial value method of accounting for its investment in Strickland, which of the following accounts would be debited to defer unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

Accepted Answer

The initial value method records the investment at cost and does not recognize intra-entity profits until realized. Therefore, to defer unrecognized intra-entity gross profit from prior periods, retained earnings would be adjusted.

Question 12

What is the consolidated total for equipment (net) at December 31, 2018?

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Question 13

In the consolidation worksheet for 2017, which of the following accounts would be debited to eliminate the intra-entity transfer of inventory?

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Question 14

What is the consolidated total of noncontrolling interest appearing in the balance sheet?

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Question 15

In the consolidation worksheet for 2017, which of the following accounts would be credited to eliminate the intra-entity transfer of inventory?

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Question 16

In the consolidation worksheet for 2017, which of the following accounts would be credited to defer unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

Accepted Answer

Inventory is credited to defer unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers. This is because the gross profit has been realized in the current year, but it is not being recognized until the inventory is sold to an outside party. Therefore, the intra-entity gross profit needs to be deferred by reducing inventory.

Question 17

What is the total of consolidated revenues?

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...

Question 18

In the consolidation worksheet for 2017, which of the following accounts would be debited to eliminate the intra-entity transfer of inventory?

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Question 19

In the consolidation worksheet for 2017, which of the following accounts would be credited to eliminate the intra-entity transfer of inventory?

Accepted Answer

The Cost of Goods Sold account is credited to eliminate the intra-entity transfer of inventory, as it reverses the effect of the internal sale on the consolidated financial statements.

Question 20

What is the total of consolidated cost of goods sold?

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Quiz 5: Consolidated Financial Statements Intra-Entity Asset Transactions

What is the total of consolidated operating expenses?

In the consolidation worksheet for 2017, which of the following accounts would be debited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

In the consolidation worksheet for 2018, which of the following accounts would be debited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

In the consolidation worksheet for 2018, which of the following accounts would be credited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

In the consolidation worksheet for 2018, assuming Carter uses the initial value method of accounting for its investment in Strickland, which of the following accounts would be credited to defer recognition of intra-entity gross profit with regard to the 2017 intra-entity transfers?

What is the consolidated total for inventory at December 31, 2018?

In the consolidation worksheet for 2017, which of the following accounts would be credited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

In the consolidation worksheet for 2017, which of the following accounts would be debited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

In the consolidation worksheet for 2018, assuming Carter uses the initial value method of accounting for its investment in Strickland, which of the following accounts would be debited to defer unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

What is the consolidated total for equipment (net) at December 31, 2018?

In the consolidation worksheet for 2017, which of the following accounts would be debited to eliminate the intra-entity transfer of inventory?

What is the consolidated total of noncontrolling interest appearing in the balance sheet?

In the consolidation worksheet for 2017, which of the following accounts would be credited to eliminate the intra-entity transfer of inventory?

In the consolidation worksheet for 2017, which of the following accounts would be credited to defer unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?

What is the total of consolidated revenues?

In the consolidation worksheet for 2017, which of the following accounts would be debited to eliminate the intra-entity transfer of inventory?

In the consolidation worksheet for 2017, which of the following accounts would be credited to eliminate the intra-entity transfer of inventory?

What is the total of consolidated cost of goods sold?