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Included in the work paper entry for intercompany sale of equipment was a credit to Retained earnings. This credit indicates that: a. the subsidiary sold
Included in the work paper entry for intercompany sale of equipment was a credit to Retained earnings. This credit indicates that: a. the subsidiary sold equipment to the parent company at a gain. b. the subsidiary sold equipment to the parent company at a loss. c. the parent company sold equipment to a subsidiary at a gain. d. the parent company sold equipment to a subsidiary at a loss. Suzlon, a subsidiary of Patni, provides services to Patni. During 2016, Suzlon charged $3,000,000 for services provided to Patni. Cost of services provided was $2, 100,000. How should the consolidated income statement report these services? A parent owns 90% of a subsidiary. The parent provides marketing services to the subsidiary during 2015. The parent charged the subsidiary $1,000,000 for the services. The services cost the parent $700,000. Which statement is true concerning the consolidation elimination entry or entries related to the intercompany services? a. Service revenue is reduced by $1,000,000 in elimination I. b. Noncontrolling interest in net income is reduced by $30,000 in elimination N. c. Service expense is reduced by $700,000 in elimination I. d. No elimination entries are required. On January 1, 2015, a wholly-owned subsidiary sold equipment to its parent for $600,000. subsidiary's books showed original cost and accumulated depreciation of $500,000 $150,000, respectively, at the date of sale. The equipment had a remaining life of five and is straight-line depreciated. On December 31, 2017 (three years after the sale), the unconfirmed gain on the equipment a. $ 40,000 b. $100,000 c. $150,000 d. $180,000 A parent has a 60% interest in its subsidiary. Unconfirmed gain on downstream sales: Increase equity in net income and the noncontrolling interest in net income Increase equity in net income Reduce equity in net income and the noncontrolling interest in net income Reduce equity in net income
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