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On January 1, 2000 Tiger Company acquired all of the stock of Rebel Company at book value Tiger Company accounts for its investment of Rebel
| On January 1, 2000 Tiger Company acquired all of the stock of Rebel Company at book value | |||||||||
| Tiger Company accounts for its investment of Rebel Company using the initial value method and Rebel pays no dividends | |||||||||
| On December 1, 2018 Tiger Company sold merchandise (inventory) to Rebel Company on credit | |||||||||
| Tiger had purchased the merchandise for $400,000 and sold it to Rebel for $800,000. | |||||||||
| at the end of the year, Rebel had not sold any of the Tiger merchandise and did not pay off their receivable | |||||||||
| In 2019 Rebel sold 75% of the merchandise acquired from Tiger to Lion Company for $1,000,000 | |||||||||
| In 2020 Rebel sold the remaining merchandise for $400,000 | |||||||||
| REQUIRED: | |||||||||
| A) MAKE THE JOURNAL ENTRY FOR TIGER WHEN IT SELLS THE MERCHANDISE TO REBEL | |||||||||
| TIGER USES PERPETUAL INVENTORY METHOD | |||||||||
| B) MAKE THE JOURNAL ENTRY REBEL MAKES WHEN IT BUYS THE MERCHANDISE FROM TIGER | |||||||||
| REBEL ALSO USES PERPETUAL INVENTORY | |||||||||
| C) MAKE THE NECESSARY WORKSHEET ENTRIES IN 2018 | |||||||||
| d) in 2018 Tiger reported unconsolidated income of $400,000 and Rebel reported income of $80,000 what | |||||||||
| is consolidated income? | |||||||||
| e) make the necessary worksheet entry in 2019 | |||||||||
| f) in 2019 Tiger reported unconsolidated income of $400,000 and Rebel reported income of $80,000 what | |||||||||
| is consolidated income? | |||||||||
| g) make the necessary worksheet entry in 2020 | |||||||||
| h) in 2020 Tiger reported unconsolidated income of $400,000 and Rebel reported income of $80,000 what | |||||||||
| is consolidated income? | |||||||||
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Auditing The Art and Science of Assurance Engagements
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Joanne C. Jones
13th Canadian edition
133405508, 978-0133405507
