1. Parent Company issued 75,000 new shares of its P5 par value ordinary shares valued at P12 per share in exchange for 90% outstanding shares of Subsidiary Company on January 1, 2021. The fair value and book value of Subsidiary's identifiable assets and liabilities were the same except inventory which was understated by P30,000 and equipment which was overstated by P90,000 (remaining useful life of 10 years). The stockholders' equity of Parent and Subsidiary at the date of acquisition were as follows: Parent Subsidiary Share Capital 600,000 250,000 Share Premium 450,000 50,000 Retained Earnings 260,000 600,000
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- A subsidiary sells merchandise to its parent at a markup of 25% on cost. In the current year, the parent had $75,000 in merchandise purchased from the subsidiary in its beginning inventory. During the current year, the parent paid $750,000 for merchandise from the subsidiary. By year-end, the parent has sold $700,000 of merchandise purchased from the subsidiary to outside customers for $900,000.What is consolidated cost of goods sold for the year? Select one: A. $ 560,000 B. $1,300,000 C. $ 900,000 D. $ 750,000Pinky Company has 80% holdings over Silk Company. During 2018, Pinky Company sold merchandise to Silk Company for P120,000 and in turn, purchased P90,000 from Silk Company. Both sales were made on account. Intercompany sales of merchandise during 2018 were made at the following gross profit rates: Downstream intercompany sale Upstream intercompany sale 25% based on sales 20% based on cost As of December 31, 2018, 30% of all intercompany sales remain in ending inventory of the buying affiliate. The beginning inventory of Pinky includes P2,500 worth of merchandise acquired from Silk on which Silk reported a profit of P1,000 while the beginning inventory of Silk also includes P3,000 of merchandise acquired from Pinky at 35% mark- up. Using cost method, the following results of operations for 2018 are as follows: Pinky Company 198,000 60,000 Silk Company 75,000 10,000 Net income Dividends declared and paid 33. How much of the consolidated net income for 2018 is attributable to the…S Ltd(a partially owned subsidiary), sold inventories for the first time to its parent, P Itd during the reporting period ended 28 February 2015, at a profit mark up of 25% on cost price. On 28 February 2015 inventories to the value of R100 000 (at cost to P Ltd) were still on hand. The company tax rate is 28%. Total sales from S Ltd to P Ltd for the current reporting period amounted to R200 000. What are the correct journal entries for elimination of intragroup sales? Select one: O a. Dr Cost of sales R200 000(P), Cr Revenue(S) P/L R200 000 O b. Dr Revenue(S) (P/L) R200 000, Cr Cost of sales(P) R200 000 O . Dr Revenue(S)P/L R100 000, Cr Cost of sales(P) R100 000 O d. Dr Revenue(P) P/L R200 000 Cr Cost of sales(P)R200 000
- S Ltd(a partially owned subsidiary), sold inventories for the first time to its parent, P Itd during the reporting period ended 28 February 2015, at a profit mark up of 25% on cost price. On 28 February 2015 inventories to the value of R100 000(at cost to P Ltd) were still on hand. The company tax rate is 28%. Total sales from S Ltd to P Ltd for the current reporting period amounted to R200 000. Which is the correct tax implication on unrealized profit? Select one: O a. Dr Deferred tax (S)SFP R5 600, Cr Income Tax expense (S) P/L R5 600 O b. Dr Deferred tax (S) SFP R7 000, Cr Income tax expense (S) P/L R 7 000 O c Dr Income tax expense(S) P/L R5 600, Cr Deferred tax (5) SFP R5 600 O d. Dr Income tax expense (S) P/L R2 800, Cr Deferred tax (S) R2 800The following information pertains to Redping Corporation for the year ended December 31, 2020.Sales to unaffiliated customers $2,000,000Inter-segment sales of products similar tothose sold to unaffiliated customers 600,000All of Redping’s segments are engaged solely in manufacturing operations. Redping has a reportablesegment if that segment’s revenue exceeds ____________________.A. $264,000B. $260,000C. $204,000D. $200,0001. During the year, Fall Company purchased merchandise having a gross invoice cost of P1,000,000. All purchases were made under the terms 2/10, n /30, FOB destination. 2. Fall Company paid freight charge of P50,000. 3. During the year, Fall Company paid for 80% of the merchandise within the discount period. 4. The remaining 20% was paid beyond the discount period. 5. Fall Company sold 70% of the merchandise it acquired for cash of P1,200,000. The other 30% remained in inventory at year-end. Required: Prepare journal entries to record the transactions using gross method and net method. 292
- Bataan Company, a VAT-registered business, purchased imported goods from Finland Company with the following related information: List price (Terms: 20%; 2/10, n/30), P 300,000 Shipping cost to acquire the inventory, P 15,000 Special handling charges, P 8,000 Purchase returns, P 3,000 Bataan Company paid 100% custom duty taxes based on the invoice cost, its directly related incidental costs and the related VAT based on the total invoice cost plus incidental costs and custom duty taxes. QUESTION: What is the cost of inventory?Shaquille Corporation began the current year with inventory of 50,000. During the year, its purchases totaled 110,000. Shaquille paid freight charges of 8,500 for those purchases. At the end of the year, Shaquille had inventory of 47,800. Prepare a schedule to determine Shaquille's cost of goods sold for the current year.Carryon Company sells a product and a 12-month service package for that for a combined price of $810. Separately, the product and the service sell for 5300 and $600, respectively At the time of purchase, how much of the combined sales price should be credited to deferred revenue? IDE
- MN Plc's draft statement of profit or loss for the year ended 31 March 20X8 includes GHS8m of revenue for credit sales made on a 'sale or return' basis. At 31 March 20X8 customers who had not yet paid had the right to return goods to the value of GHS2.6m. MN Plc applied a mark-up on cost of 30% on all of these sales. MN Plc's customers have in the past returned goods under this type of agreement. By what amount should MN Plc's profit for the year ended 31 March 20X8 be reduced in respect of this? A. GHS2,600,000 B. GHS780,000 C. GHS600,000 D. GHS2,400,000MEXICO Company and all its divisions are engaged in a merchandising business. The 2021 income statement of MEXICO showed the following: Sales to unaffiliated customers P 20,000,000 Gain on sale of machinery 1,500,000 Operating expenses 15.000.000) Net income P 6,500,000 In the process of determining the consolidated net income, intersegment sales of P3,000,000 were eliminated. What is the minimum amount of segment revenue to be reported by a division in order for it to be considered as a reportable segment under IFRS 8, Operating Segments?Cullumber Corporation shipped $21,600 of merchandise on consignment to Oriole Company. Cullumber paid freight costs of $2,000. Oriole Company paid $450 for local advertising, which is reimbursable from Cullumber. By year-end, 59% of the merchandise had been sold for $19,900. Oriole notified Cullumber, retained a 9% commission, and remitted the cash due to Cullumber.Prepare Cullumber’s journal entry when the cash is received.