Question
11. When the parent sold a bond to its subsidiary, the account bonds payable shall be eliminated in the working paper and shall not be
11. When the parent sold a bond to its subsidiary, the account bonds payable shall be eliminated in the working paper and shall not be presented in the consolidated statement of financial position.
a. True
b. False
12. In determining the consolidated cost of sale, unrealized profit on ending inventories is deducted from the total cost of sales of parent and subsidiary.
a. True
b. False
13. Unrealized profit on Ending Inventory is not considered in determining the consolidated net income attributed to the controlling interest.
a. True
b. False
14. All of the following are considered relevant in determining the amount of consolidated operating expenses, except
a. Selling price of an equipment sold by the subsidiary to its parent
b. Gain on sale arising from a downstream sale of furniture and fixture
c. Excess of the carrying value over the fair value of the inventory held by the subsidiary on the date of acquisition
d. Undervaluation of the carrying value of the machinery held by the subsidiary on the date of acquisition
15. Which must be considered in determining the non-controlling interest in the net income of the subsidiary?
a. Realized profit in beginning inventory arising from a downstream sale of inventory
b. Unrealized profit in ending inventory arising from a downstream sale of inventory
c. Upstream sale of land that results to a loss on sale
d. Downstream sale of equipment that results to a gain
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