1. Power Corporation owns 75 percent of Swift Companys stock. Swift provides health care services to its employees and those of Power. During 20X2, Power recorded $44,000 as health care expense for medical care given to its employees by Swift. Swifts costs incurred in providing the services to Power were $34,000.(Leave no cells blank, enter "0" wherever required.)

Required:

a.	By what amount will consolidated net income change when the intercompany services are eliminated in preparing Powers consolidated statements for 20X2?

b.	What would be the impact of eliminating the intercompany services on consolidated net income if Power owned 100 percent of Swifts stock rather than 75 percent?

c.	If in its consolidated income statement for 20X2 Power had reported total health care costs of $78,000, what was the cost to Swift of providing health care services to its own employees?

2.

Bowen Corporation owns 70 percent of Roan Corporations voting common stock. On March 12, 20X2, Roan sold land it had purchased for $140,000 to Bowen for $185,000. Bowen plans to build a new warehouse on the property in 20X3

Required:

a.	Prepare the worksheet consolidation entries to remove the effects of the intercompany sale of land in preparing the consolidated financial statements at December 31, 20X2 and 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b.	Prepare the worksheet consolidation entries needed at December 31, 20X3 and 20X4, if Bowen had initially purchased the land for $150,000 and sold it to Roan on March 12, 20X2, for $180,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)