during 2010 von co sold inventory to its wholly owned subsidiary lor 503355 | Homework Solutions

ACC 4700 QUIZ 5 Chapter 05 Consolidated Financial Statements – Intra-Entity Asset Transactions Last Name???First Name??? QUESTION #1 12. During 2010, Von Co. sold inventory to its wholly-owned subsidiary, Lord Co. The inventory cost $30,000 and was sold to Lord for $44,000. From the perspective of the combination, when is the $14,000 gain realized? A) When the goods are sold to a third party by Lord. B) When Lord pays Von for the goods. C) When Von sold the goods to Lord. D) When the goods are used by Lord. E) No gain can be recognized since the transaction was between related parties. ?? QUESTION #2 17. Yukon Co. acquired 75% percent of the voting common stock of Ontario Corp. on January 1, 2011. During the year, Yukon made sales of inventory to Ontario. The inventory cost Yukon $260,000 and was sold to Ontario for $390,000. Ontario still had $60,000 of the goods in its inventory at the end of the year. The amount of unrealized intercompany profit that should be eliminated in the consolidation process at the end of 2011 is A) $15,000. B) $20,000. C) $32,500. D) $30,000. E) $110,000. ??QUESTION #3 18. Prince Corp. owned 80% of Kile Corp.’s common stock. During October 2011, Kile sold merchandise to Prince for $140,000. At December 31, 2011, 50% of this merchandise remained in Prince’s inventory. For 2011, gross profit percentages were 30% of sales for Prince and 40% of sales for Kile. The amount of unrealized intercompany profit in ending inventory at December 31, 2011 that should be eliminated in the consolidation process is A) $28,000. B) $56,000. C) $22,400. D) $21,000. E) $42,000. ??QUESTION #4 1. On November 8, 2011, Power Corp. sold land to Wood Co., its wholly owned subsidiary. The land cost $61,500 and was sold to Wood for $89,000. From the perspective of the combination, when is the gain on the sale of the land realized? A) Proportionately over a designated period of years. B) When Wood Co. sells the…