ch7practice - Advanced Accounting Chapter 7 Juan Lewis...

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Advanced Accounting Chapter 7 Juan Lewis Name: __________________________ Date: _____________ 1. In the year a subsidiary sells land to its parent company at a gain, a workpaper entry is made debiting 1. Retained Earnings - P Company. 2. Retained Earnings - S Company. 3. Gain on Sale of Land. A) 1 B) 2 C) 3 D) both 1 and 2. 2. In years subsequent to the year a 90% owned subsidiary sells equipment to its parent company at a gain, the noncontrolling interest in consolidated income is computed by multiplying the noncontrolling interest percentage by the subsidiary's reported net income A) minus the net amount of unrealized gain on the intercompany sale. B) plus the net amount of unrealized gain on the intercompany sale. C) minus intercompany gain considered realized in the current period. D) plus intercompany gain considered realized in the current period. 3. Company S sells equipment to its parent company (P) at a gain. In years subsequent to the year of the intercompany sale, a workpaper entry is made under the cost method debiting A) Retained Earnings - P. B) Noncontrolling interest. C) Equipment. D) all of these. Page 1
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4. Pinick Corp. owns 90% of the outstanding common stock of Shell Company. On December 31, 2011, Shell sold equipment to Pinick for an amount greater than the equipment's book value but less than its original cost. The equipment should be reported on the December 31, 2011 consolidated balance sheet at A) Pinick's original cost less 90% of Shell's recorded gain. B)
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This note was uploaded on 02/22/2012 for the course ACCOUNTING 401 taught by Professor Jeter during the Spring '12 term at Kaplan University.

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ch7practice - Advanced Accounting Chapter 7 Juan Lewis...

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