Advanced Accounting Chapter 5 Questions

Chapter 5 Problems: 1, 2, 3, 9
1.Which of the following describes the impact on amalgamate financial statements of upstream and downstream transfers?

a.No difference exists in consolidated financial statements between upstream and downstream transfers.

b. downriver transfers affect the computation of the noncontrolling interests share of the subsidiarys income but upstream transfers do not.

c.Upstream transfers affect the computation of the noncontrolling interests share of the subsidiarys income but downstream transfers do not. condemn answer

d.Downstream transfers can be do by because the parent company makes them.

2. power Corporation owns 80 per centum of Lee Corporations common stock. During October, Lee sold merchandise to big businessman for $100,000. At December 31, 50 percent of this merchandise be in Kings inventory. Gross profit percentages were 30 percent for King and 40 percent for Lee. The amount of unrealized intercompany profit in ending inventory at December 31 that should be eliminated in the consolidation process is

a.$40,000.

b.$20,000. correct answer

c.$16,000.

d.$15,000.

(AICPA adapted)

3.



In computer science the noncontrolling interests share of consolidated net income, how should the subsidiarys income be adjusted for intercompany transfers?

a.The subsidiarys describe income is adjusted for the impact of upstream transfers prior to compute the noncontrolling interests allocation. correct answer

b.The subsidiarys reported income is adjusted for the impact of all transfers prior to compute the noncontrolling interests allocation.

c.The subsidiarys reported income is not adjusted for the impact of transfers prior to work out the noncontrolling interests allocation.

d.The subsidiarys reported income is adjusted for the impact of downstream transfers prior to computing the noncontrolling interests allocation.
9.Wallton Corporation owns 70 percent of the outstanding stock of...If you inadequacy to get a full essay, order it on our website: Orderessay



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