Chapter_2_day_2_solutions

Chapter_2_day_2_solutions - 21. (12 minutes) (Equity...

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Unformatted text preview: 21. (12 minutes) (Equity balances for one year includes intercompany transfers) a. Equity income accrual2009 ($90,000 30%).......................... $27,000 Amortization2009 (given).......................................................... (9,000) Intercompany gain recognized on 2008 transfer*..................... 1,200 Intercompany gain deferred on 2009 transfer**......................... (2,640 ) Equity income recognized by Russell in 2009..................... $16,560 *Markup on 2008 transfer ($16,000/$40,000).............................. 40% Unrealized gain: Remaining inventory (40,000 25%)..................................... $ 10,000 Markup (above)........................................................................ 40% Ownership percentage............................................................ 30% Intercompany gain deferred from 2008 until 2009............... $1,200 **Markup on 2009 transfer ($22,000/$50,000)............................. 44% Unrealized gain: Remaining inventory (50,000 40%)..................................... $20,000 Markup (above)........................................................................ 44% Ownership percentage............................................................ 30% Intercompany gain deferred from 2009 until 2010............... $2,640 b. Investment in Thacker, 1/1/09...................................................... $335,000 Equity income2009 (see [a] above)......................................... 16,560 Dividends2009 ($30,000 30%)............................................... (9,000 ) Investment in Thacker, 12/31/09.................................................. $342,560 22. (20 Minutes) (Equity method balances after conversion to equity...
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This note was uploaded on 04/05/2010 for the course ACCY 260 taught by Professor Yu during the Spring '10 term at Ferrum.

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Chapter_2_day_2_solutions - 21. (12 minutes) (Equity...

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