Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Power Corporation owns 75 percent of Swift Company's stock. Swift provides health care services to its employees and those of Power. During 20X2, Power recorded

image text in transcribed Power Corporation owns 75 percent of Swift Company's stock. Swift provides health care services to its employees and those of Power. During 20X2, Power recorded $43,000 as health care expense for medical care given to its employees by Swift. Swift's costs incurred in providing the services to Power were $33,500. Note: 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 Power's consolidated statements for 202 ? b. What would be the impact of eliminating the intercompany services on consolidated net income if Power owned 100 percent of Swift's stock rather than 75 percent? c. If in its consolidated income statement for 202 Power had reported total health care costs of $75,000, what was the cost to Swift of providing health care services to its own employees

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

LOQ 12-11: What are the causes and consequences of anger?

Answered: 1 week ago

Question

suggest a range of work sample exercises and design them

Answered: 1 week ago