Flashcards in Review 13B, 18-20 Deck (12):
The parent sold merchandise of $60,000 to its sub, which included a $20,000 profit. Half the merchandise was sold at year end, in the eliminating journal entry, what is the amount credited to ending inventory?
The parent sold merchandise of $60,000 to its sub, which included a $20,000 profit. Half the merchandise was sold at year end, in the eliminating journal entry, what is the amount debited to sales?
The parent paid $91,000 to purchase $100,000 of outstanding bonds issued by its sub. The bonds mature in 4 years and were originally issued at par of $100,000. Interest is paid annually and immediately before the parents purchase of the bonds. What is the elimination journal entry?
Bonds payable. 100,000
Discount on bonds payable. 9,000
Gain on retirement of bonds. 9,000
Investment in bonds. 100,000
In the first quarter the estimated tax on income earned is $10,000. Also $30,000 is estimated for income tax on current values of assets and liabilities and their tax bases.
What amount should be reported between liabilities and net worth as estimated income taxes?
2) what is the total of the amount or amounts that should be reported for income taxes?
$30,000 taxes between fair values of assets/liabilities and bases
2) $40,000 taxes between fair values of assets/liabilities and
Their bases and estimated quarterly tax
Bond issue costs, how long are they amortized, when the bonds have a 5 year life, dated April 1st but are issued in August 31st?
55 months = 60 months - 5 months late issuance
If the fair value option is used for valuing bonds payable, must the fair value option be applied to valuing all bonds?
No, fair value option may be applied on an instrument by instrument
If a firm elects the fair value option for valuing its bonds payable...
The fair value of the bond and the principal obligation value
Must be disclosed
A gain or loss on redemption of bonds is the difference between...
The cash paid and the net book value of the bonds
Net book value of bonds when there is a premium and issue costs, calculation
Net book value of bonds =
Face value of bonds + premium - issue costs
When market rate is greater than bond coupon rate, the bonds trade at a...
When bonds are issued, with Nondetachable warrants for an amount equal to face amount of bonds and the stock warrants do not have a determinable value. How is bond discount affected? How are bonds payable affected?
Only bonds payable increase in this transaction