8-25 - P8-25 Intercorporate Transfers of Inventory and

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Unformatted text preview: P8-25 Intercorporate Transfers of Inventory and EquipmentBIP59,000-44,000=15,000L ----------- A60,000L----------AEIP = 27/60 x 20,000 = 9,000BONDS:A=Sub =IssuerEntireIntercompany1/1/x4Bonds payable200,00080,000Premium 4% 8,000Amort: 8,000/1080032012/31/x5Balance 8x8006,4008x320 = 2,56012/31/x6Balance5,6002,24012/31/x7Balance4,8001,920Interest Expense 80,000 x 8% = 6,400 320 = 6,080Lance=Parent=PurchaserIntercompany12/31/x5Investment in Bonds 78,400Discount 1,600Amort: 1,600/820012/31/x6Balance78,60012/31/x7Balance78,800Interest Income 80,000 x 8% = 6,400 + 200 = 6,600Constructive retirement in x5 BP of 82,560 retired for 78,400 =gain of 4,160Interest expense 6,080Interest income 6,600 difference 520EQUITY METHOD ENTRIES x7:Investment in S36,000Income from S36,000to record net income 48,000 x 75%Cash18,000Investment in S18,000Dividends 24,000 x 75%f.Eliminating entries:E(1)Income from Subsidiary36,000Dividends Declared18,000 Investment in Avery Company Stock18,000 Eliminate income from subsidiary.Eliminate income from subsidiary....
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This note was uploaded on 04/18/2008 for the course ACCT cost taught by Professor Staff during the Spring '08 term at Oklahoma State.

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8-25 - P8-25 Intercorporate Transfers of Inventory and

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