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Parent Company owns all of the outstanding shares of Sub Company and uses the initial value method of accounting. During 2016, Parent Company sells inventory
- Parent Company owns all of the outstanding shares of Sub Company and uses the initial value method of accounting. During 2016, Parent Company sells inventory costing $80,000 to Sub Company for $100,000.
- What is the required elimination for this transaction in 2016? Include the parent and subs entries for partial credit. Assume Sub Company sells all goods to a 3rd party by the end of the year.
- What is the required elimination for this transaction in 2016? Include the parent and subs entries for partial credit. Assume Sub Company sells all goods to a 3rd party by the end of the year.
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- Assume that Sub Company has $60,000 in ending inventory related to the purchase from Parent Company at the end of 2016. What is the required elimination entry in 2016 related to ending inventory?
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- Assume that Sub Company sold the $60,000 of the inventory purchased from Preferred Company in 2016 during 2017. What is the required elimination entry in 2017?
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- Assume the same facts as in C except that the parent uses the equity method of account. What is the Elimination required in 2017?
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Auditing Cases An Active Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
2nd Edition
0130674842, 978-0130674845
