Chap006_Classproblems_Solu_Days123

Chap006_Classproblems_Solu_Days123 - Solutions to Chapter 6...

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Solutions to Chapter 6 In‐class Problems - 1 - E6-3 Elimination Entries for Land Transfer a. Eliminating entry, December 31, 20X4: E(1) Gain on Sale of Land 10,000 Land 10,000 Eliminating entry, December 31, 20X5: E(1) Retained Earnings, January 1 10,000 Land 10,000 b. Eliminating entry, December 31, 20X4: E(1) Gain on Sale of Land 10,000 Land 10,000 E(2) Noncontrolling Interest 4,000 Income to Noncontrolling Interest 4,000 Eliminating entry, December 31, 20X5: E(1) Retained Earnings, January 1 6,000 Noncontrolling Interest 4,000 Land 10,000 E6-7 Transfer of Land a. Eliminating entry, December 31, 20X2: E(1) Gain on Sale of Land 45,000 Land 45,000 Eliminating entry, December 31, 20X3: E(1) Retained Earnings, January 1 31,500 Noncontrolling Interest 13,500 Land 45,000 b. Eliminating entries, December 31, 20X3 and 20X4: E(1) Retained Earnings, January 1 30,000 Land 30,000

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Solutions to Chapter 6 In‐class Problems - 2 - E6-2 Multiple-Choice Questions on Intercompany Transactions 1. d When only retained earnings is debited, and not the noncontrolling interest, a gain has been recorded in a prior period on the parent's books. P6-28 Multiple-Choice Questions 1. d 2. c 3. a 4. a 5. d E6-13 Consolidated Net Income Computation a. Downstream sale of land : 20X4 20X5 Verry’s separate operating income \$ 90,000 \$110,000 Less: Unrealized gain on sale of land (25,000 ) Verry’s realized operating income \$ 65,000
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This note was uploaded on 05/01/2010 for the course MGMT 503 taught by Professor Staff during the Spring '08 term at Purdue.

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Chap006_Classproblems_Solu_Days123 - Solutions to Chapter 6...

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