Question
WWW has an investment in XYZ bonds with a par value of $200,000. WWW collected the interest on June 30, 2022, and then sold the
WWW has an investment in XYZ bonds with a par value of $200,000.
WWW collected the interest on June 30, 2022, and then sold the bonds to ABC for $220,000.
On that date, the bonds had a book value of XYZ of $185,000.
What amount of gain or loss on the withdrawal of bonds do you have to recognize during the consolidation process?
- 1. Neither gains nor losses can be recognized on intercompany transactions.
- 2. $35,000 loss
- 3. $35,000 profit
- 4. $20,000 profit
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The correct answer is option 4 which is 20000 profit Th...
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Advanced Financial Accounting
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
10th edition
78025621, 978-0078025624
