10/31 Chapter 7 Class Flashcards
1
Q
basic elimination entry BV
A
Eliminate equity sub
inv in sub
give nci income
give nci equity
example
Inc from sub 135000
NCI in NI 15000
CS 500000
PIC 100000
RE 120000
INV in sub 783000
NCI in NA 87000
2
Q
excess value FV
A
Pmt fvs on consol f/s
give CI equity
giving nci equity
3
Q
amort of excess fv
A
calculate income/loss impact of fv’s added to consolidation
allocate CI
allocate NCI
4
Q
modified equity method
A
we don’t do the excess amortization on the books
5
Q
non depreciable assets
A
similar to inventory transfer
eliminate like unrealized gross profit
6
Q
depreciable assets
A
eliminate the sellers gain and what it would be on our books
7
Q
transfer of services
A
acctg serv 100000 Cash 100000 Cash 100000 Service income 100000 get rid of the entry on the test
8
Q
Ownership Land Transfer
A
they sold 40000 land for 100000 to the sub we have to
Dr Gain 60000
Cr Land 60000
in the first year
the next year
DR RE 60000
CR Land 60000
because the gain is no longer on the income statement
in 2007 they sold it
Cash 120
Gain 20
Land 100
should have been
cash 120
Gain 80
Land 40
2007
DR RE 60000
CR Gain 60000
we do this because the gain should have been 80 they already took 20 so we add on the 60
9
Q
test
A
basic, excess value, amort of excess,
10
Q
depreciable asset
A
upstream transaction
11
Q
problem
A
do 7-12 do it do it do it.
do chapter 7 homework and do that problem
do beginning retained earnings
