Chapter 7 Solution

Powerful Essays
Chapter 7 - Consolidated Financial Statements - Ownership Patterns And Income Taxes

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS - OWNERSHIP PATTERNS AND INCOME TAXES
Answers to Problems 1. D 2. B 3. D 4. C 5. C 6. C 7. A Damson 's accrual-based income: Operational income ................................................................... Defer unrealized gain ................................................................ Damson 's accrual-based income ....................................... Crimson 's accrual-based income: Operational income ................................................................... Investment Income (90% of Damson’s realized income) ....... Crimson 's accrual-based income .......................................

$200,000 (40,000) $160,000

$200,000 144,000 $344,000

7-1

Chapter 7 - Consolidated Financial Statements - Ownership Patterns And Income Taxes

Bassett 's accrual-based income: Operational income ................................................................... Investment income (80% of Crimson 's realized income) ....... Bassett 's accrual-based income ........................................ 8. C Icede 's accrual-based income: Operational income ................................................................... Defer unrealized gain ................................................................ Icede 's accrual-based income ............................................ Outside ownership .................................................................... Noncontrolling interest ....................................................... Healthstone 's accrual-based income: Operational income ................................................................... Defer unrealized gain ................................................................ Investment income (80% of Icede 's accrual-based income) . Healthstone 's accrual-based income ................................. Outside ownership

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