On December 31,20X8,Pancake Company acquired controlling ownership of Syrup Company.A consolidated balance sheet was prepared immediately.Partial balance sheet data for the two companies and the consolidated entity at that date follow:
During 20X8,Pancake Company provided consulting services to Syrup Company and has not yet paid for them.There were no other receivables or payables between the companies at December 31,20X8.
-Based on the information given,what is the amount of unpaid consulting services at December 31,20X8,on work done by Pancake Company for Syrup Company?
A)$0
B)$10,000
C)$5,000
D)$15,000

Question

On December 31,20X8,Pancake Company acquired controlling ownership of Syrup Company.A consolidated balance sheet was prepared immediately.Partial balance sheet data for the two companies and the consolidated entity at that date follow:
  During 20X8,Pancake Company provided consulting services to Syrup Company and has not yet paid for them.There were no other receivables or payables between the companies at December 31,20X8.
-Based on the information given,what is the amount of unpaid consulting services at December 31,20X8,on work done by Pancake Company for Syrup Company?
A)$0 
B)$10,000 
C)$5,000 
D)$15,000

Quizplus · Accepted Answer

Since there were no other receivables or payables between the companies at December 31, 20X8, the only unpaid amount would be for the consulting services provided by Pancake Company to Syrup Company. Based on the balance sheet data, the accounts receivable of Pancake Company and the accounts payable of Syrup Company both amount to $10,000. Therefore, the amount of unpaid consulting services would also be $10,000. Hence, the best choice is B.

On December 31,20X8,Pancake Company Acquired Controlling Ownership of Syrup Company