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Advanced Accounting Essay

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Advanced Accounting Essay

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  • November 7, 2011
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1.Pratt Company owns 80% of Storey Company’s common stock. During 2008, Storey sold $400,000 of merchandise to Pratt. At December 31, 2008, one-third of the merchandise remained in Pratt’s inventory. In 2008, gross profit percentages were 25% for Pratt and 30% for Storey. The amount of unrealized intercompany profit that should be eliminated in the consolidated statements is 2.Pratt Company owns 80% of Storey Company’s common stock. During 2008, Storey sold $400,000 of merchandise to Pratt. At December 31, 2008, one-third of the merchandise remained in Pratt’s inventory. In 2008, gross profit percentages were 25% for Pratt and 30% for Storey. The amount of cost of goods sold in the consolidated statements is 3.Sales from a parent to a subsidiary are called

4.Sales from to parent to from subsidiary are called
5.Sales from a subsidiary to are called
6.In determining controlling interest in consolidated income in the consolidated financial statements, unrealized intercompany profit on inventory acquired by a parent from its subsidiary should 7.P Company acquired an 70% interest in S Company on January 1, 2011, for $270,000 cash when S Company had common stock of $150,000 and retained earnings of $150,000. All excess was attributable to plant assets with a 10 year life. S Company made $30,000 in 2011 and paid no dividends. P Company’s separate income in 2011 was $375,000. Excess depreciation expense in 2011 was 8.P Company acquired an 70% interest in S Company on January 1, 2011, for $270,000 cash when S Company had common stock of $150,000 and retained earnings of $150,000. All excess was attributable to plant assets with a 10 year life. S Company made $30,000 in 2011 and paid no dividends. P Company’s separate income in 2011 was $375,000. Excess depreciation expense in 2011 was 9.P Company acquired an 70% interest in S Company on January 1, 2011, for $270,000 cash when S Company had common stock of $150,000 and retained earnings of...