F4 - Intercompany Transactions

Question 1

At 12/31, Grey Inc. owned 90% of Winn Corp., a consolidated subsidiary, and 20% of Carr Corp., an investee in which Grey cannot exercise significant influence. On the same date, Grey had receivables of $300,000 from Winn and $200,000 from Carr. In its December 31, Year 1 consolidated balance sheet, Grey should report accounts receivable from affiliates of:

Answer 1

$200,000

The receivable from Winn will be eliminated in the consolidation. The receivable from Carr will not be eliminated (Carr is not a subsidiary).