Chapter 7 Homework Solutions part 1

Chapter 7 Homework - E7-1E7-2E7-3E7-4E7-51.ab[5]cca2.c[1]d[6]bad3.a[2]bc[9]e[10]a4.c[2]c[6]a5.c[3]b[7]6.cb[8[1 Since all of the inventory sold

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Unformatted text preview: E7-1E7-2E7-3E7-4E7-51.ab [5]cca2.c [1]d [6]bad3.a [2]bc [9]e [10]a4.c [2]c [6]a5.c [3]b [7]6.cb [8][1] - Since all of the inventory sold through, Parker's CoGS is consolidated CoGS. Eliminate Smith'sCoGS for the intercompany inventory. $400,000 + $300,000 - $250,000.[2] - $40,000 x 140% = $56,000 is Twill's cost and Webb's revenue that need to be eliminated.[3] - Dean is a nonfactor in this question, as it is not consolidated or accounted for under the equitymethod. 1/4 of the goods from Kent are still in inventory, and so, then is 1/4 of the profit from thetransaction. $320,000 - ($48,000 / 4) = $308,000.[4] - 1/4 of Banks' cost in Lamm's profit. If $60,000 of inventory is left at the end of the year, thentotal consolidated inventory is:175,000 Banks250,000 Lamm45,000 Banks from Lamm ($60,000 x (1 - 1/4))470,000 [5] - As discussed in class, some really unfortunate wording here. $500,000 is the sale price;Small's cost, not Park's. Park's cost, at a 60% margin, is $200,000. 4/5 of the goods have soldthrough, so the consolidated entity's cost of goods sold should be $200,000 x 4/5 = $160,000.800,000 Park's total cost of goods sold(40,000) Park's excess for intercompant goods still in inventory700,000 Small's total cost of goods sold(400,000) Small's recorded cost of goods sold for intercompany goods ($500,000 x 4/5)1,060,000 As I mentioned in class, my original file crashed. Below are E7-11, 12, and 13, which were not on the handout I passed out in class. I'll reconstitute solutions for E7-6, 8, 9, and 10, which were on that sheet,...
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This note was uploaded on 04/12/2011 for the course ACC 5120 taught by Professor Weimer during the Fall '10 term at Wayne State University.

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Chapter 7 Homework - E7-1E7-2E7-3E7-4E7-51.ab[5]cca2.c[1]d[6]bad3.a[2]bc[9]e[10]a4.c[2]c[6]a5.c[3]b[7]6.cb[8[1 Since all of the inventory sold

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