Cupo de crédito asignado de acuerdo al riesgo de crédito

E. Non-controlling interest in subsidiary's net income is increased by an upstream gain in the year of transfer.

AACSB: Reflective thinking AICPA BB: Critical Thinking AICPA FN: Measurement Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-05 Explain the difference between upstream and downstream intra-entity transfers and how each affects the computation of noncontrolling interest balances.

Learning Objective: 05-07 Prepare the consolidation entries to remove the effects of upstream and downstream intra-entity fixed asset transfers across affiliated entities.

Topic: Intra-Entity Transfer of Depreciable Assets Topic: Unrealized Gross Profit-Effect on Noncontrolling Interest

50. Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available

pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2012.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

Compute the equity in earnings of Gargiulo reported on Posito's books for 2012.

A. $63,000.

B. $62,730.

C. $63,270.

D. $70,000.

E. $62,700.

Parent's Part of Net Income 2012 ($70,000 × .90) $63,000 - Earnings Adjustment for Unrealized Gains of Sub 2012 ($1,200 × .25 × .90) $270 = $62,730

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 05-03 Explain why consolidated entities defer intra-entity gross profit in ending inventory and the consolidation procedures required to recognize profits when actually earned.

Learning Objective: 05-05 Explain the difference between upstream and downstream intra-entity transfers and how each affects the computation of noncontrolling interest balances.

Topic: All Inventory Remains at Year-End Topic: Unrealized Gross Profit-Effect on Noncontrolling Interest

51. Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available

pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2012.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

Compute the equity in earnings of Gargiulo reported on Posito's books for 2013.

A. $76,500.

B. $77,130.

C. $75,870.

D. $75,600.

E. $75,800.

Parent's Part of Net Income 2013 ($85,000 × .90) $76,500 - Earnings Adjustment for Unrealized Gains of Sub 2013 ($4,000 × .25 × .90) $900 + (Realized Gains of Sub for 2012) $270 = $75,870

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 05-04 Understand that the consolidation process for inventory transfers is designed to defer the unrealized portion of an intra-entity gross profit from the year of transfer into the year of disposal or consumption.

Learning Objective: 05-05 Explain the difference between upstream and downstream intra-entity transfers and how each affects the computation of noncontrolling interest balances.

Topic: Unrealized Gross Profit-Effect on Noncontrolling Interest Topic: Unrealized Gross Profit-Year Following Transfer (Year 2)

52. Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available

pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2012.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

Compute the equity in earnings of Gargiulo reported on Posito's books for 2014.

A. $84,600.

B. $84,375.

C. $83,925.

D. $84,825.

E. $84,850.

Parent's Part of Net Income 2014 ($94,000 × .90) $84,600 - Earnings Adjustment for Unrealized Gains of Sub 2014 ($3,000 × .25 × .90) $675 + (Realized Gains of Sub for 2013) $900 = $84,825

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 05-04 Understand that the consolidation process for inventory transfers is designed to defer the unrealized portion of an intra-entity gross profit from the year of transfer into the year of disposal or consumption.

Learning Objective: 05-05 Explain the difference between upstream and downstream intra-entity transfers and how each affects the computation of noncontrolling interest balances.

Topic: Unrealized Gross Profit-Effect on Noncontrolling Interest Topic: Unrealized Gross Profit-Year Following Transfer (Year 2)

53. Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available

pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2012.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

Compute the non-controlling interest in Gargiulo's net income for 2012.

A. $6,970.

B. $7,000.

C. $7,030.

D. $6,270.

E. $6,230.

Parent's Part of Net Income 2012 ($70,000 × .10) $7,000 - Earnings Adjustment for Unrealized Gains of Sub 2012 ($1,200 × .25 × .10) $30 = $6,970

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 05-03 Explain why consolidated entities defer intra-entity gross profit in ending inventory and the consolidation procedures required to recognize profits when actually earned.

Learning Objective: 05-05 Explain the difference between upstream and downstream intra-entity transfers and how each affects the computation of noncontrolling interest balances.

Topic: All Inventory Remains at Year-End Topic: Unrealized Gross Profit-Effect on Noncontrolling Interest

54. Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available

pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2012.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

Compute the non-controlling interest in Gargiulo's net income for 2013.

A. $8,500.

B. $8,570.

C. $8,430.

D. $8,400.

E. $7,580.

Parent's Part of Net Income 2013 ($85,000 × .10) $8,500 - Earnings Adjustment for Unrealized Gains of Sub 2013 ($4,000 × .25 × .10) $100 + (Realized Gains of Sub for 2012) $30 = $8,430

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 05-04 Understand that the consolidation process for inventory transfers is designed to defer the unrealized portion of an intra-entity gross profit from the year of transfer into the year of disposal or consumption.

Learning Objective: 05-05 Explain the difference between upstream and downstream intra-entity transfers and how each affects the computation of noncontrolling interest balances.

Topic: Unrealized Gross Profit-Effect on Noncontrolling Interest Topic: Unrealized Gross Profit-Year Following Transfer (Year 2)

55. Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available

pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2012.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

Compute the non-controlling interest in Gargiulo's net income for 2014.

A. $9,400.

B. $9,375.

C. $9,425.

D. $9,325.

E. $8,485.

Parent's Part of Net Income 2014 ($94,000 × .10) $9,400 - Earnings Adjustment for Unrealized Gains of Sub 2014 ($3,000 × .25 × .10) $75 + (Realized Gains of Sub for 2013) $100 = $9,425

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 05-04 Understand that the consolidation process for inventory transfers is designed to defer the unrealized portion of an intra-entity gross profit from the year of transfer into the year of disposal or consumption.

Learning Objective: 05-05 Explain the difference between upstream and downstream intra-entity transfers and how each affects the computation of noncontrolling interest balances.

Topic: Unrealized Gross Profit-Effect on Noncontrolling Interest Topic: Unrealized Gross Profit-Year Following Transfer (Year 2)

56. Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available

pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2012.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

For consolidation purposes, what amount would be debited to cost of goods sold for the 2012 consolidation worksheet with regard to unrealized gross profit of the intra-entity transfer of merchandise?

A. $300.

B. $240.

C. $2,000.

D. $1,600.

E. $270.

Earnings Adjustment for Unrealized Gains of Sub 2012 ($1,200 × .25) = $300

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Analyze Difficulty: 2 Medium Learning Objective: 05-03 Explain why consolidated entities defer intra-entity gross profit in ending inventory and the consolidation procedures required to recognize profits when actually earned.

Topic: All Inventory Remains at Year-End

57. Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available

pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2012.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

For consolidation purposes, what amount would be debited to cost of goods sold for the 2013 consolidation worksheet with regard to the unrealized gross profit of the 2013 intra-entity transfer of merchandise?

A. $1,000.

B. $800.

C. $3,000.

D. $2,400.

E. $900.

Earnings Adjustment for Unrealized Gains of Sub 2013 ($4,000 × .25) = $1,000

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Analyze Difficulty: 2 Medium Learning Objective: 05-03 Explain why consolidated entities defer intra-entity gross profit in ending inventory and the consolidation procedures required to recognize profits when actually earned.

Topic: All Inventory Remains at Year-End

58. Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available

pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2012.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

For consolidation purposes, what amount would be debited to cost of goods sold for the 2014 consolidation worksheet with regard to the unrealized gross profit of the 2014 intra-entity transfer of merchandise?

A. $600.

B. $750.

C. $3,760.

D. $3,000.

E. $675.

Earnings Adjustment for Unrealized Gains of Sub 2014 ($3,000 × .25) = $750

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Analyze Difficulty: 2 Medium Learning Objective: 05-03 Explain why consolidated entities defer intra-entity gross profit in ending inventory and the consolidation procedures required to recognize profits when actually earned.

Topic: All Inventory Remains at Year-End

59. Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available

pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2012.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

For consolidation purposes, what amount would be debited to January 1 retained earnings for the 2012 consolidation worksheet entry with regard to the unrealized gross profit of the 2012 intra-entity transfer of merchandise?

A. $0.

B. $1,600.

C. $300.

D. $240.

E. $270.

Zero - No Earnings Adjustment would be necessary in January 2012

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Analyze Difficulty: 2 Medium Learning Objective: 05-04 Understand that the consolidation process for inventory transfers is designed to defer the unrealized portion of an intra-entity gross profit from the year of transfer into the year of disposal or consumption.

Topic: Unrealized Gross Profit-Year Following Transfer (Year 2)

60. Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available

pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2012.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

For consolidation purposes, what amount would be debited to January 1 retained earnings for the 2013 consolidation worksheet entry with regard to the unrealized gross profit of the 2012 intra-entity transfer of merchandise?

A. $240.

B. $300.

C. $2,000.

D. $1,600.

E. $270.

Realized Gains of Sub 2012 ($1,200 × .25) = $300

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Analyze Difficulty: 2 Medium Learning Objective: 05-04 Understand that the consolidation process for inventory transfers is designed to defer the unrealized portion of an intra-entity gross profit from the year of transfer into the year of disposal or consumption.

Topic: Unrealized Gross Profit-Year Following Transfer (Year 2)

61. Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available

pertaining to intra-entity purchases. Gargiulo was acquired on January 1, 2012.

Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.

For consolidation purposes, what amount would be debited to January 1 retained earnings for the 2014 consolidation worksheet entry with regard to the unrealized gross profit of the 2013 intra-entity transfer of merchandise?

A. $3,000.

B. $2,400.

C. $1,000.

D. $800.

E. $900.

Realized Gains of Sub 2013 ($4,000 × .25) = $1,000

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Analyze Difficulty: 2 Medium Learning Objective: 05-04 Understand that the consolidation process for inventory transfers is designed to defer the unrealized portion of an intra-entity gross profit from the year of transfer into the year of disposal or consumption.

Topic: Unrealized Gross Profit-Year Following Transfer (Year 2)

62. Patti Company owns 80% of the common stock of Shannon, Inc. In the current year, Patti reports sales of $10,000,000 and cost of goods sold of $7,500,000. For the same period, Shannon has sales of $200,000 and cost of goods sold of

$160,000. During the year, Patti sold merchandise to Shannon for $60,000 at a price based on the normal markup. At the end of the year, Shannon still possesses 30 percent of this inventory.

Compute consolidated sales.

Consolidated Sales = Parent's Sales $10,000,000 + Sub's sales $200,000 =

$10,200,000 - Intra-Entity Sales $60,000 = $10,140,000

AACSB: Analytic Learning Objective: 05-02 Demonstrate the consolidation procedures to eliminate intra-entity sales and purchases balances.

Topic: The Sales and Purchases Accounts

63. Patti Company owns 80% of the common stock of Shannon, Inc. In the current year, Patti reports sales of $10,000,000 and cost of goods sold of $7,500,000. For the same period, Shannon has sales of $200,000 and cost of goods sold of

$160,000. During the year, Patti sold merchandise to Shannon for $60,000 at a price based on the normal markup. At the end of the year, Shannon still possesses 30 percent of this inventory.

Compute consolidated cost of goods sold.

A. $7,500,000.

B. $7,600,000.

C. $7,615,000.

D. $7,604,500.

E. $7,660,000.

Consolidated COGS = Parents COGS $7,500,000 + Sub's COGS $160,000 - Total Intra-Entity Transfer $60,000 + Deferred Unrealized Profit ($15,000 × .30) $4,500

Learning Objective: 05-02 Demonstrate the consolidation procedures to eliminate intra-entity sales and purchases balances.

Learning Objective: 05-03 Explain why consolidated entities defer intra-entity gross profit in ending inventory and the consolidation procedures required to recognize profits when actually earned.

Topic: All Inventory Remains at Year-End Topic: The Sales and Purchases Accounts

64. Patti Company owns 80% of the common stock of Shannon, Inc. In the current year, Patti reports sales of $10,000,000 and cost of goods sold of $7,500,000. For the same period, Shannon has sales of $200,000 and cost of goods sold of

$160,000. During the year, Patti sold merchandise to Shannon for $60,000 at a price based on the normal markup. At the end of the year, Shannon still possesses 30 percent of this inventory.

Assume the same information, except Shannon sold inventory to Patti. Compute consolidated sales.

Consolidated Sales = Parent's Sales $10,000,000 + Sub's sales $200,000 =

$10,200,000 - Intra-Entity Sales $60,000 = $10,140,000

AACSB: Analytic Learning Objective: 05-02 Demonstrate the consolidation procedures to eliminate intra-entity sales and purchases balances.

Topic: The Sales and Purchases Accounts

65. Wilson owned equipment with an estimated life of 10 years when it was acquired for an original cost of $80,000. The equipment had a book value of $50,000 at January 1, 2012. On January 1, 2012, Wilson realized that the useful life of the equipment was longer than originally anticipated, at ten remaining years.

On April 1, 2012 Simon Company, a 90% owned subsidiary of Wilson Company, bought the equipment from Wilson for $68,250 and for depreciation purposes used the estimated remaining life as of that date. The following data are available pertaining to Simon's income and dividends:

Compute the gain on transfer of equipment reported by Wilson for 2012.

A. $19,500.

B. $18,250.

C. $11,750.

D. $38,250.

E. $37,500.

January 1, 2012 BV $50,000/10yrs Expected Useful Life = $5,000 per yr

Depreciation Expense. Sale on April 1, 2012 required Three Months Depreciation Expense leaving a BV on Sale of $48,750. Sale Price of $68,250 - BV on Sale of

$48,750 = $19,500 Gain on Sale

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 05-07 Prepare the consolidation entries to remove the effects of upstream and downstream intra-entity fixed asset transfers across affiliated entities.

Topic: Intra-Entity Transfer of Depreciable Assets

66. Wilson owned equipment with an estimated life of 10 years when it was acquired for an original cost of $80,000. The equipment had a book value of $50,000 at January 1, 2012. On January 1, 2012, Wilson realized that the useful life of the equipment was longer than originally anticipated, at ten remaining years.

On April 1, 2012 Simon Company, a 90% owned subsidiary of Wilson Company, bought the equipment from Wilson for $68,250 and for depreciation purposes used the estimated remaining life as of that date. The following data are available pertaining to Simon's income and dividends:

Compute the amortization of gain through a depreciation adjustment for 2012 for consolidation purposes.

A. $1,950.

B. $1,825.

C. $1,500.

D. $2,000.

E. $5,250.

Amortization of Gain on Transfer of Equipment = $19,500 Gain/9yrs 9 mos.

Remaining Useful Life = $2,000 per yr. × 9 mos. of 2012 = $1,500 Depreciation Adjustment for 2012

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 05-07 Prepare the consolidation entries to remove the effects of upstream and downstream intra-entity fixed asset transfers across affiliated entities.

Topic: Intra-Entity Transfer of Depreciable Assets

67. Wilson owned equipment with an estimated life of 10 years when it was acquired for an original cost of $80,000. The equipment had a book value of $50,000 at January 1, 2012. On January 1, 2012, Wilson realized that the useful life of the equipment was longer than originally anticipated, at ten remaining years.

On April 1, 2012 Simon Company, a 90% owned subsidiary of Wilson Company, bought the equipment from Wilson for $68,250 and for depreciation purposes used the estimated remaining life as of that date. The following data are available pertaining to Simon's income and dividends:

Compute the amortization of gain through a depreciation adjustment for 2013 for consolidation purposes.

A. $1,950.

B. $1,825.

C. $2,000.

D. $1,500.

E. $7,000.

Amortization of Gain on Transfer of Equipment = $19,500 Gain/9yrs 9 mos.

Remaining Useful Life = $2,000 per yr. × 12 mos. of 2013 = $2,000 Depreciation Adjustment for 2013

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 05-07 Prepare the consolidation entries to remove the effects of upstream and downstream intra-entity fixed asset transfers across affiliated entities.

Topic: Intra-Entity Transfer of Depreciable Assets

68. Wilson owned equipment with an estimated life of 10 years when it was acquired for an original cost of $80,000. The equipment had a book value of $50,000 at January 1, 2012. On January 1, 2012, Wilson realized that the useful life of the equipment was longer than originally anticipated, at ten remaining years.

On April 1, 2012 Simon Company, a 90% owned subsidiary of Wilson Company, bought the equipment from Wilson for $68,250 and for depreciation purposes used the estimated remaining life as of that date. The following data are available pertaining to Simon's income and dividends:

Compute the amortization of gain through a depreciation adjustment for 2014 for consolidation purposes.

A. $1,925.

B. $1,825.

C. $2,000.

D. $1,500.

E. $7,000.

Amortization of Gain on Transfer of Equipment = $19,500 Gain/9yrs 9 mos.

Remaining Useful Life = $2,000 per yr. × 12 mos. of 2014 = $2,000 Depreciation Adjustment for 2014

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 05-07 Prepare the consolidation entries to remove the effects of upstream and downstream intra-entity fixed asset transfers across affiliated entities.

Topic: Intra-Entity Transfer of Depreciable Assets

69. Wilson owned equipment with an estimated life of 10 years when it was acquired for an original cost of $80,000. The equipment had a book value of $50,000 at January 1, 2012. On January 1, 2012, Wilson realized that the useful life of the equipment was longer than originally anticipated, at ten remaining years.

On April 1, 2012 Simon Company, a 90% owned subsidiary of Wilson Company, bought the equipment from Wilson for $68,250 and for depreciation purposes used the estimated remaining life as of that date. The following data are available pertaining to Simon's income and dividends:

Compute Wilson's share of income from Simon for consolidation for 2012.

A. $72,000.

B. $90,000.

C. $73,575.

D. $73,800.

E. $72,500.

Parent's Part of Net Income 2012 ($100,000 × .90) = $90,000

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Difficulty: 1 Easy Learning Objective: 05-07 Prepare the consolidation entries to remove the effects of upstream and downstream intra-entity fixed asset transfers across affiliated entities.

Topic: Intra-Entity Transfer of Depreciable Assets

70. Wilson owned equipment with an estimated life of 10 years when it was acquired for an original cost of $80,000. The equipment had a book value of $50,000 at

70. Wilson owned equipment with an estimated life of 10 years when it was acquired for an original cost of $80,000. The equipment had a book value of $50,000 at

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