Power of Serbia
New member
1. An intercompany sale took place whereby the transfer price exceeded the book value of a depreciable asset. Which statement is true for the year following the sale?
A. a worksheet entry is made with a debit to gain for a downstream transfer
B. a worksheet entry is made with a debit to gain for an upstream transfer
C. A worksheet entry is made with a debit to investment in subsidiary for a downstream transfer when the parent uses the equity method
D. a worksheet entry is made with a debit to retained earnings for a downstream transfer
E. no worksheet entry
2. An intercompany sale took place whereby the book value exceeded the transfer price of a depreciable asset. Which statement is true for the year following the sale?
A. a worksheet entry is made with a debit to r/e (retained earnings) for an upstream transfer
B. a worksheet entry is made with a credit to retained earnings for an upsteam transfer
c. a worksheet entry is made with a debit to retained earnings for a downstream transfer
d.a worksheet entry is made with a debit to investment in subsidiary for a downstream transfer
E. no worksheet entry
3. When a parent uses the equity method throughout the year to account for investment in a subsidiary., which of the following statements is false before making adjustments on the consolidated worksheet?
a. parent company net income equals controlling interest in consolidated net income
b.parent company retained earnings equals consolidated retained earnings
c. parent company total assets equals consolidated total assets
d. parent company dividends equals consolidated dividends
e. goodwill may need to be recorded
4. when a parent uses the initial value method throughout the year to account for investment in a subsidiary, which of the following statements is true before making adjustments on the consolidated worksheet?
A. a parent company net income equals consolidated net income
b. parent company retained earnings equals consolidated retained earnings
c. parent company total assets equals consolidated total assets
d. parent company dividends equals consolidated dividends
e. goodwill is never recognized.
I believe 1 is d, 2 i am not sure about, 3 i am not sure about, and 4 i think is e
A. a worksheet entry is made with a debit to gain for a downstream transfer
B. a worksheet entry is made with a debit to gain for an upstream transfer
C. A worksheet entry is made with a debit to investment in subsidiary for a downstream transfer when the parent uses the equity method
D. a worksheet entry is made with a debit to retained earnings for a downstream transfer
E. no worksheet entry
2. An intercompany sale took place whereby the book value exceeded the transfer price of a depreciable asset. Which statement is true for the year following the sale?
A. a worksheet entry is made with a debit to r/e (retained earnings) for an upstream transfer
B. a worksheet entry is made with a credit to retained earnings for an upsteam transfer
c. a worksheet entry is made with a debit to retained earnings for a downstream transfer
d.a worksheet entry is made with a debit to investment in subsidiary for a downstream transfer
E. no worksheet entry
3. When a parent uses the equity method throughout the year to account for investment in a subsidiary., which of the following statements is false before making adjustments on the consolidated worksheet?
a. parent company net income equals controlling interest in consolidated net income
b.parent company retained earnings equals consolidated retained earnings
c. parent company total assets equals consolidated total assets
d. parent company dividends equals consolidated dividends
e. goodwill may need to be recorded
4. when a parent uses the initial value method throughout the year to account for investment in a subsidiary, which of the following statements is true before making adjustments on the consolidated worksheet?
A. a parent company net income equals consolidated net income
b. parent company retained earnings equals consolidated retained earnings
c. parent company total assets equals consolidated total assets
d. parent company dividends equals consolidated dividends
e. goodwill is never recognized.
I believe 1 is d, 2 i am not sure about, 3 i am not sure about, and 4 i think is e