In-class example

In-class example - Steele sold land that originally cost $1...

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In-class Example -- Chapter 5 Transfer of Inventory Pierson Company owns 100% of the voting stock of Steele company. During 2011, Pierson buys 1,000 widgets from Steele for $100,000 (upstream transfer of inventory). The widgets originally cost Steele $60,000. 1. Assume Pierson sell all the widgets for $130,000 at year end on 12/31/2011. What are the consolidation journal entries? 2. Assume Pierson sells ¾ of the inventory at year end. What are consolidation journal entries? 3. If Pierson sells the remainder inventory in 2012. What are the consolidated journal entries for 2012? 4. If Steele purchase inventory from Pierson assuming that information about inventory stays the same and Pierson uses equity method (downstream transfer of inventory). What are consolidated journal entries for question 2 and 3?
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Transfer of Land Pierson company owns 100% of the voting stock of Steele company and on August 5, 2011,
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Unformatted text preview: Steele sold land that originally cost $1 million to Pierson at a $1.5 million transfer price. 1. What are consolidated journal entries at the end of 2011 and 2012 assuming Pierson does not sell the land? 2. What are the consolidated journal entries when Pierson sells the land for $2 million? Transfer of Depreciable Assets Pierson Company owns 100% of the voting stock of Steele Company and on September 5, 2011, Steele sold equipment with a book value of $1 million to Pierson for $1.5 million. Steele purchased the equipment several years ago for $2 million. Pierson adopt a straight-line depreciation method with no salvage value. Pierson records depreciation expense of $150,000 ($1.5 million/ 10 years) at the end of 2011. 1. What are the consolidated journal entries for 2011? 2. What are the consolidated journal entries for 2012?...
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In-class example - Steele sold land that originally cost $1...

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