F4M6

Question 1

Intercompany Transactions

Answer 1

transactions between a parent company and a subsidiary company

view as if money is moving from one pocket to another

in the consolidated statements, we have to eliminate so that we are not over or under stating

Question 2

Balance sheet intercompany transactions

Answer 2

eliminate intercompany assets and liabilities

Question 3

Eliminating entries are done for (internal or external)

Answer 3

external

Question 4

How to determine profit when part of inventory is sold in intercompany transactions

Answer 4

difference in intercompany sales and intercompany COGS is intercompany profit

multiply overstatement in inventory and COGS

Question 5

Intercompany sale of land

Answer 5

eliminate gain or loss

eliminate write up of land

Question 6

To find intercompany profit, you must find the difference in

Answer 6

inventory

Question 7

To find intercompany sales, you must find the difference in

Answer 7

revenue

Question 8

Dividends paid in intercompany transactions

Answer 8

removed

paying from one pocket to antoher