Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The comparative consolidated Income statements of a parent and its 7 5 % - owned subsidlary were prepared Incorrectly as at December 3 1 and
The comparative consolidated Income statements of a parent and its owned subsidlary were prepared Incorrectly as at December
and are shown in the table given below. The following items were overlooked when the statements were prepared:
The Year gain on sale of assets resulted from the subsidlary selling equipment to the parent on September The parent
Immediately leased the equipment back to the subsidiary at an annual rental of $ This was the only intercompany rent
transaction that occurred each year. The equipment had a remalning life of five years on the date of the intercompany sale.
The Year gain on sale of assets resulted from the January sale of a bullding, with a remalning life of seven years, by the
subsidlary to the parent.
Both galns were taxed at a rate of
Required:
Prepare correct consolidated Income statements for Years and Input all values as positive numbers. Leave no cells blank be
certain to enter zero wherever required. Omit $ sign in your response.The comparative consolidated income statements of a parent and its owned subsidiary were prepared incorrectly as at December and are shown in the table given below. The following items were overlooked when the statements were prepared:
The Year gain on sale of assets resulted from the subsidiary selling equipment to the parent on September The parent immediately leased the equipment back to the subsidiary at an annual rental of $ This was the only intercompany rent transaction that occurred each year. The equipment had a remaining life of five years on the date of the intercompany sale.
The Year gain on sale of assets resulted from the January sale of a building, with a remaining life of seven years, by the subsidiary to the parent.
Both gains were taxed at a rate of
CONSOLIDATED INCOME STATEMENTS
Year Year
Miscellaneous revenues $ $
Gain on sale of assets
Rental revenue
Miscellaneous expenses
Rental expense
Depreciation expense
Income tax expense
Noncontrolling interest
Net income $ $
Required:
Prepare correct consolidated income statements for Years and Input all values as positive numbers. Leave no cells blank be certain to enter zero wherever required. Omit $ sign in your response.
Parent Company
Corrected Consolidated Income Statements
Years and
Year Year
Miscellaneous revenues $ Numeric ResponseEdit Unavailable. correct. $ Numeric ResponseEdit Unavailable. correct.
Miscellaneous expense Numeric ResponseEdit Unavailable. correct. Numeric ResponseEdit Unavailable. correct.
Rent expense Numeric ResponseEdit Unavailable. correct. Numeric ResponseEdit Unavailable. correct.
Depreciation expense Numeric ResponseEdit Unavailable. incorrect. Numeric ResponseEdit Unavailable. incorrect.
Income tax expense Numeric ResponseEdit Unavailable. incorrect. Numeric ResponseEdit Unavailable. incorrect.
Consolidated net income $ Numeric ResponseEdit Unavailable. incorrect. $ Numeric ResponseEdit Unavailable. incorrect.
Attributable to:
Shareholders of Parent $ Numeric ResponseEdit Unavailable. incorrect. $ Numeric ResponseEdit Unavailable. incorrect.
NCI Numeric ResponseEdit Unavailable. incorrect. Numeric ResponseEdit Unavailable. incorrect.
$ $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started