Chapter Five Hoyle

ch5
Student: ___________________________________________________________________________
1. On November 8, 2009, Power Corp. sold land to Wood Co., its wholly owned subsidiary. The land cost
$61,500 and was sold to Wood for $89,000. From the perspective of the combination, when is the gain on the
sale of the land realized?
A. Proportionately over a designated period of years
B. When Wood Co. sells the land to a third party
C. No gain can be recognized
D. As Wood uses the land
E. When Wood Co. begins using the land productively
2. Edgar Co. acquired 60% of Kindall Co. on January 1, 2009. During 2009, Edgar made several sales of
inventory to Kindall. The cost and selling price of the goods were $140,000 and $200,000, respectively. Kindall
still owned one-fourth of the goods at the end of 2009. Consolidated cost of goods sold for 2009 was
$2,140,000. How would consolidated cost of goods sold have differed if the inventory transfers had been for the
same amount and cost, but from Kindall to Edgar?
A. Consolidated cost of goods sold would have been $2,140,000
B. Consolidated cost of goods sold would have been $2,175,000
C. The effect on consolidated cost of goods sold cannot be predicted from the information provided
D. Consolidated cost of goods sold would have been reduced because of the non-controlling interest in the
subsidiary
E. Consolidated cost of goods sold would have been higher because of the non-controlling interest in the
subsidiary
3. On January 1, 2009, Race Corp. acquired 80% of the voting common stock of Gallow Inc. During the year,
Race sold to Gallow for $450,000 goods which cost $330,000. Gallow still owned 15% of the goods at
year-end. Gallow's reported net income was $204,000 and Race's net income was $806,000. Race decided to
use the equity method to account for this investment. What was the non-controlling interest's share of
consolidated net income?
A. $37,200
B. $22,800
C. $30,900
D. $32,900
E. $40,800
4. Webb Co. acquired 100% of Rand Inc. on January 5, 2009. During 2009, Webb sold Rand for $2,400,000
goods that cost $1,800,000. Rand still owned 40% of the goods at the end of the year. Cost of goods sold was
$10,800,000 for Webb and $6,400,000 for Rand. What was consolidated cost of goods sold?
A. $17,200,000
B. $15,040,000
C. $14,800,000
D. $16,960,000
E. $14,560,000
5. Gentry Inc. acquired 100% of Gaspard Farms on January 5, 2009. During 2009, Gentry sold Gaspard Farms
for $625,000 goods which had cost $425,000. Gaspard Farms still owned 12% of the goods at the end of the
year. In 2010, Gentry sold goods with a cost of $800,000 to Gaspard Farms for $1,000,000 and Gaspard Farms
still owned 10% of the goods at year-end. For 2010, cost of goods sold was $1,200,000 for Gaspard Farms and
$5,400,000 for Gentry. What was consolidated cost of goods sold for 2010?
A. $6,600,000
B. $6,596,000
C. $5,620,000
D. $5,596,000
E. $5,625,000
6. X-Beams Inc. owned 70% of the voting common stock of Kent Corp. During 2009, Kent made several sales
of inventory to X-Beams. The total selling price was $180,000 and the cost was $100,000. At the end of the
year, 20% of the goods were still in X-Beams' inventory. Kent's reported net income was $300,000. What was
the non-controlling interest in Kent's net income?
A. $90,000
B. $85,200
C. $54,000
D. $94,800
E. $86,640
7. Justings Co. owned 80% of Evana Corp. During 2009, Justings sold to Evana land with a book value of
$48,000. The selling price was $70,000. In its accounting records, Justings should
A. Not recognize a gain on the sale of the land since it was made to a related party
B. Recognize a gain of $17,600
C. Defer recognition of the gain until Evana sells the land to a third party
D. Recognize a gain of $8,000
E. Recognize a gain of $22,000
8. Norek Corp. owned 70% of the voting common stock of Thelma Co. On January 2, 2009, Thelma sold a
parcel of land to Norek. The land had a book value of $32,000 and was sold to Norek for $45,000. Thelma's
reported net income for 2009 was $119,000. What is the non-controlling interest's share of Thelma's net
income?
A. $35,700
B. $31,800
C. $39,600
D. $22,200
E. $26,100
9. Clemente Co. owned all of the voting common stock of Snider Co. On January 2, 2009, Clemente sold some
equipment to Snider for $125,000. The equipment had cost $140,000. At the time of the sale, the balance in
accumulated depreciation was $40,000. The equipment had a remaining useful life of five years and a $0
salvage value. Straight-line depreciation is used by both Clemente and Snider. At what amount should the
equipment (net of depreciation) be included on the consolidated balance sheet dated December 31, 2009?
A. $100,000
B. $95,000
C. $75,000
D. $80,000
E. $85,000
10. During 2009, Von Co. sold inventory to its wholly-owned subsidiary, Lord Co. The inventory cost $30,000
and was sold to Lord for $44,000. From the perspective of the combination, when is the $14,000 gain realized?
A. When the goods are sold to a third party by Lord
B. When Lord pays Von for the goods
C. When Von sold the goods to Lord
D. When the goods are used by Lord
E. No gain can be recognized since the transaction was between related parties
11. Bauerly Co. owned 70% of the voting common stock of Devin Co. During 2009, Devin made frequent sales
of inventory to Bauerly. There were unrealized gains of $40,000 in the beginning inventory and $25,000 at the
end of the year. Devin reported net income of $137,000 for 2009. Bauerly decided to use the equity method to
account for the investment. What is the non-controlling interest's share of Devin's net income for 2009?
A. $41,100
B. $33,600
C. $21,600
D. $45,600
E. $36,600
12. Chain Co. owned all of the voting common stock of Shannon Corp. The corporations' balance sheets dated
December 31, 2009, include the following balances for land: for Chain-$416,000 and for Shannon-$256,000.
On the original date of acquisition, the book value of Shannon's land was equal to its fair value. On April 4,
2010, Chain sold to Shannon a parcel of land with a book value of $65,000. The selling price was $83,000.
There were no other transactions which affected the companies' land accounts during 2010. What is the
consolidated balance for land on the 2010 balance sheet?
A. $672,000
B. $690,000
C. $755,000
D. $737,000
E. $654,000
13. Gibson Corp. owned a 90% interest in Sparis Co. Sparis frequently made sales of inventory to Gibson. The
sales, which include a markup over cost of 25%, were $420,000 in 2009 and $500,000 in 2010. At the end of
each year, Gibson still owned 30% of the goods. Net income for Sparis was $912,000 during 2010. What was
the non-controlling interest's share of Sparis' net income for 2010?
A. $85,680
B. $90,600
C. $90,720
D. $91,680
E. $91,800
14. On January 1, 2009, Payton Co. sold equipment to its subsidiary, Starker Corp., for $115,000. The
equipment had cost $125,000 and the balance in accumulated depreciation was $45,000. The equipment had an
estimated remaining useful life of eight years and $0 salvage value. Both companies use straight-line
depreciation. On their separate 2009 income statements, Payton and Starker reported depreciation expense of
$84,000 and $60,000, respectively. The amount of depreciation expense on the consolidated income statement
for 2009 would have been
A. $144,000
B. $148,375
C. $109,000
D. $134,000
E. $139,625
15. Yukon Co. acquired 75% percent of the voting common stock of Ontario Corp. on January 1, 2009. During
the year, Yukon made sales of inventory to Ontario. The inventory cost Yukon $260,000 and was sold to
Ontario for $390,000. Ontario still had $60,000 of the goods in its inventory at the end of the year. The amount
of unrealized intercompany profit that should be eliminated in the consolidation process at the end of 2009 is
A. $15,000
B. $20,000
C. $32,500
D. $30,000
E. $110,000
16. Prince Corp. owned 80% of Kile Corp.'s common stock. During October 2009, Kile sold merchandise to
Prince for $140,000. At December 31, 2009, 50% of this merchandise remained in Prince's inventory. For 2009,
gross profit percentages were 30% of sales for Prince and 40% of sales for Kile. The amount of unrealized
intercompany profit in ending inventory at December 31, 2009 that should be eliminated in the consolidation
process is
A. $28,000
B. $56,000
C. $22,400
D. $21,000
E. $42,000
Pot Co. holds 90% of the common stock of Skillet Co. During 2009, Pot reported sales of $1,120,000 and cost
of goods sold of $840,000. For this same period, Skillet had sales of $420,000 and cost of goods sold of
$252,000. Also during 2009, Pot sold merchandise to Skillet for $140,000. The subsidiary still possesses 40%
of this inventory at the end of 2009. Pot had established the transfer price based on its normal markup.
17. What are consolidated sales and cost of goods sold?

A. $1,400,000 and $952,000
B. $1,400,000 and $966,000
C. $1,540,000 and $1,078,000
D. $1,400,000 and $1,022,000
E. $1,540,000 and $1,092,000
18. Assuming that the transfers were from Skillet Co. to Pot Co., what are consolidated sales and cost of goods
sold?
A. $1,400,000 and $952,000
B. $1,400,000 and $966,000
C. $1,540,000 and $1,078,000
D. $1,400,000 and $974,400
E. $1,540,000 and $1,092,000
19. Dalton Corp. owned 70% of the outstanding common stock of Shrugs Inc. On January 1, 2007, Dalton
acquired a building with a ten-year life for $420,000. No salvage value was anticipated and the building was to
be depreciated on the straight-line basis. On January 1, 2009, Dalton sold this building to Shrugs for $392,000.
At that time, the building had a remaining life of eight years but still no expected salvage value. In preparing
financial statements for 2009, how does this transfer affect the calculation of Dalton's share of consolidated net
income?
A. Consolidated net income must be reduced by $44,800
B. Consolidated net income must be reduced by $50,400
C. Consolidated net income must be reduced by $49,000
D. Consolidated net income must be reduced by $56,000
E. Consolidated net income must be reduced by $53,200
On January 1, 2009, Pride, Inc. bought 80% of the outstanding voting common stock of Strong Corp. for
$364,000. Of this payment, $28,000 was allocated to equipment (with a five-year life) that had been
undervalued on Strong's books by $35,000. Any remaining excess was attributable to goodwill which has not
been impaired.
As of December 31, 2009, before preparing the consolidated worksheet, the financial statements appeared as
follows:
During 2009, Pride bought inventory for $112,000 and sold it to Strong for $140,000. Only half of this purchase
had been paid for by Strong by the end of the year. 60% of these goods were still in the company's possession
on December 31.
20. What is the total of consolidated revenues?

A. $700,000
B. $644,000
C. $588,000
D. $560,000
E. $840,000
21. What is the total of consolidated operating expenses?

A. $42,000
B. $47,600
C. $53,200
D. $48,000
E. $36,400
22. What is the total of consolidated cost of goods sold?

A. $196,000
B. $212,800
C. $184,800
D. $203,000
E. $168,000
23. What is the consolidated total of non-controlling interest appearing on the balance sheet?
A. $100,800
B. $97,440
C. $93,800
D. $98,840
E. $101,900
24. What is the consolidated total for equipment (net) at December 31, 2009?
A. $952,000
B. $1,058,400
C. $1,069,600
D. $1,064,000
E. $1,066,800
25. What is the consolidated total for inventory at December 31, 2009?
A. $336,000
B. $280,000
C. $364,000
D. $347,200
E. $349,300
Strickland Company sells inventory to its parent, Carter Company, at a profit during 2009. Select the correct
answer.
26. With regard to the intercompany sale, which of the following choices would be a debit entry in the
consolidated worksheet for 2009?
A. Retained earnings
B. Cost of goods sold
C. Inventory
D. Investment Strickland Company
E. Additional paid-in capital
27. With regard to the intercompany sale, which of the following choices would be a credit entry in the
C. Inventory
C. Inventory
C. Inventory
Walsh Company sells inventory to its subsidiary, Fisher Company, at a profit during 2009. Walsh uses the
equity method to account for its investment in Fisher.
C. Inventory
D. Investment Fisher Company
C. Inventory
C. Inventory
D. Investment in Fisher Company
C. Inventory
34. When comparing the difference between an upstream and downstream transfer of inventory and using the
initial value method, which of the following statements is true?
A. Income from subsidiary will be lower by the amount of the ending inventory profit multiplied by the
non-controlling interest percentage for downstream transfers
B. Income from subsidiary will be higher by the amount of the ending inventory profit multiplied by the
C. Income from subsidiary will be reduced for downstream ending inventory profit but not for upstream profit,
before the effect of the non-controlling interest
D. Income from subsidiary will be reduced for upstream ending inventory profit but not for downstream profit,
E. Income from subsidiary will be the same for upstream and downstream profit
A. Income from subsidiary will be lower by the amount of the beginning inventory profits multiplied by the
non-controlling interest percentage for upstream transfers
B. Income from subsidiary will be higher by the amount of the beginning inventory profits multiplied by the
C. Income from subsidiary will be reduced for downstream ending inventory profits but not for upstream
profits, before the non-controlling interest
D. Income from subsidiary will be reduced for upstream ending inventory profits but not for downstream
E. Income from subsidiary will be the same for upstream and downstream profits
36. Which of the following statements is true regarding inventory transfers between a parent and its subsidiary,
using the initial value method?
A. The sale of merchandise between a parent and its subsidiary represents an arm's-length transaction and thus
provides the basis for the recognition of profit on such transfers
B. Profits on upstream transfers associated with the parent's ending inventory are subtracted from subsidiary net
income for the current year in the calculation of parent's income from subsidiary. These year-end deferrals are
then added to next year's subsidiary net income in the calculation of parent's income from subsidiary. This
procedure is inappropriate because all the intercompany transactions unsold at year-end may not be sold in the
next year
C. Profits on upstream transfers associated with the parent's ending inventory are subtracted from subsidiary net
procedure is appropriate even if all the intercompany transactions unsold at year-end may not be sold in the next
year
D. Merchandise transfers from a parent to its subsidiary that have not been sold to unaffiliated parties should be
included in consolidated inventory at their transfer price
E. Non-controlling interest in subsidiary's net income should not be reduced for upstream or downstream ending
inventory profits
37. Which of the following statements is true regarding an intercompany sale of land?
A. A loss is always recognized but a gain is eliminated on a consolidated income statement
B. A loss and a gain are always eliminated on a consolidated income statement
C. A loss and a gain are always recognized on a consolidated income statement
D. A gain is always recognized but a loss is eliminated on a consolidated income statement
E. A gain or loss is eliminated by adjusting stockholders' equity through comprehensive income
38. Parent sold land to its subsidiary for a gain in 2007. The subsidiary sold the land externally for a gain in
2010. Which of the following statements is true?
A. A gain will be reported on the consolidated income statement in 2007
B. A gain will be reported on the consolidated income statement in 2010
C. No gain will be reported on the 2010 consolidated income statement
D. Only the parent company will report a gain in 2010
E. The subsidiary will report a gain in 2007
39. 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 is necessary
40. An intercompany sale took place whereby the book value exceeded the transfer price of a depreciable asset.
A. A worksheet entry is made with a debit to retained earnings for an upstream transfer
B. A worksheet entry is made with a credit to retained earnings for an upstream 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
41. An intercompany sale took place whereby the transfer price was less than 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 investment in subsidiary for an upstream transfer
B. A worksheet entry is made with a debit to investment in subsidiary for a downstream transfer
C. A worksheet entry is made with a credit to investment in subsidiary for a downstream transfer when the
D. A worksheet entry is made with a debit to retained earnings for an upstream transfer
42. Which of the following statements is true concerning an intercompany transfer of a depreciable asset?
A. Non-controlling interest in subsidiary's net income is never affected by a gain on the transfer
B. Non-controlling interest in subsidiary's net income is always affected by a gain on the transfer
C. Non-controlling interest in subsidiary's net income is affected by a downstream gain only
D. Non-controlling interest in subsidiary's net income is affected only when the transfer is upstream
E. Non-controlling interest in subsidiary's net income is increased by an upstream gain in the year of transfer
Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on
selling price. The following data are available pertaining to intercompany purchases. Gargiulo was acquired on
January 1, 2009.
Assume the equity method is used. The following data are available pertaining to Gargiulo's income and
dividends.
43. Compute the income from Gargiulo reported on Posito's books for 2009.
A. $63,000
B. $62,730
C. $63,270
D. $70,000
E. $62,700
A. $76,500
B. $77,130
C. $75,870
D. $75,600
E. $75,800
A. $84,600
B. $84,375
C. $83,925
D. $84,825
E. $84,850
46. Compute the non-controlling interest in Gargiulo's net income for 2009.
A. $6,970
B. $7,000
C. $7,030
D. $6,270
E. $6,230
A. $8,500
B. $8,570
C. $8,430
D. $8,400
E. $7,580
A. $9,400
B. $9,375
C. $9,425
D. $9,325
E. $8,485
49. For consolidation purposes, what amount would be debited to cost of goods sold for consolidation
(worksheet entry G) in 2009?
A. $300
B. $240
C. $2,000
D. $1,600
E. $270
A. $1,000
B. $800
C. $3,000
D. $2,400
E. $900
A. $600
B. $750
C. $3,760
D. $3,000
E. $675
52. For consolidation purposes, what amount would be debited to retained earnings for consolidation
A. $0
B. $1,600
C. $300
D. $240
E. $270
A. $240
B. $300
C. $2,000
D. $1,600
E. $270
A. $3,000
B. $2,400
C. $1,000
D. $800
E. $900
Patti Company holds 80% of the common stock of Shannon, Inc. In the current year, Patti reports sales of
$10,000,000 and cost of goods sold of $7,500,000. For the same period, Shannon has sales of $200,000 and cost
of goods sold of $160,000. During the year, Patti sold merchandise to Shannon for $60,000 at a price based on
the normal markup. At the end of the year, Shannon still possesses 30 percent of this inventory.
55. Compute consolidated sales.

A. $10,000,000
B. $10,126,000
C. $10,140,000
D. $10,200,000
E. $10,260,000
56. Compute consolidated cost of goods sold.

A. $7,500,000
B. $7,600,000
C. $7,615,000
D. $7,604,500
E. $7,660,000
57. Assume the same information, except Shannon sold inventory to Patti. Compute consolidated sales.
A. $10,000,000
B. $10,126,000
C. $10,140,000
D. $10,200,000
E. $10,260,000
On April 1, 2009 Wilson Company, a 90% owned subsidiary of Simon Company, bought equipment from
Simon for $68,250. On January 1, 2009, Simon realized that the useful life of the equipment was longer than
originally anticipated, at ten remaining years. The equipment had an original cost to Simon of $80,000 and a
book value of $50,000 with a 10-year remaining life as of January 1, 2009.
The following data are available pertaining to Wilson's income and dividends:
58. Compute the gain on transfer of equipment reported by Simon for 2009.
A. $19,500
B. $18,250
C. $11,750
D. $38,250
E. $37,500
59. Compute the amortization of gain for 2009 for consolidation purposes.
A. $1,950
B. $1,825
C. $1,500
D. $2,000
E. $5,250
A. $1,950
B. $1,825
C. $2,000
D. $1,500
E. $7,000
A. $1,925
B. $1,825
C. $2,000
D. $1,500
E. $7,000
62. Compute Simon's share of income from Wilson for consolidation for 2009.
A. $72,000
B. $90,000
C. $73,575
D. $73,800
E. $72,500
A. $108,000
B. $110,000
C. $106,000
D. $109,825
E. $109,800
A. $118,825
B. $115,000
C. $117,000
D. $119,000
E. $118,800
On January 1, 2009, Smeder Company, an 80% owned subsidiary of Collins, Inc., transferred equipment with a
10-year life (six of which remain with no salvage value) to Collins in exchange for $84,000 cash. At the date of
transfer, Smeder's records carried the equipment at a cost of $120,000 less accumulated depreciation of
$48,000. Straight-line depreciation is used. Smeder reported net income of $28,000 and $32,000 for 2009 and
2010, respectively.
65. Compute the gain recognized by Smeder Company relating to the equipment for 2009.
A. $36,000
B. $34,000
C. $12,000
D. $10,000
E. $0
66. Compute Collins' share of Smeder's net income for 2009.

A. $12,400
B. $14,400
C. $11,200
D. $12,800
E. $18,000

A. $27,600
B. $23,600
C. $27,200
D. $24,000
E. $34,000
68. For consolidation purposes, what net debit or credit will be made in 2009 relating to the equipment
transfer?
A. Debit accumulated depreciation, $46,000
B. Debit accumulated depreciation, $48,000
C. Credit accumulated depreciation, $48,000
D. Credit accumulated depreciation, $46,000
E. Debit accumulated depreciation, $2,000
69. What is the net effect on consolidated net income in 2009, before allocation to controlling and
non-controlling interests, due to the equipment transfer?
A. Increase $2,000
B. Decrease $12,000
C. Decrease $10,000
D. Decrease $14,000
E. Increase $10,000
Stiller Company, an 80% owned subsidiary of Leo Company, purchased land from Leo on March 1, 2009, for
$75,000. The land originally cost Leo $60,000. Stiller reported net income of $125,000 and $140,000 for 2009
and 2010, respectively. Leo uses the equity method to account for its investment.
70. Compute the gain or loss on the intercompany sale of land.

A. $15,000 loss
B. $15,000 gain
C. $50,000 loss
D. $50,000 gain
E. $65,000 gain
71. On a consolidation worksheet, what adjustment would be made for 2009 regarding the land transfer?
A. Debit gain for $50,000
B. Credit gain for $50,000
C. Debit land for $15,000
D. Credit land for $15,000
E. Credit gain for $15,000
72. On a consolidation worksheet, having used the equity method, what adjustment would be made for 2010
regarding the land transfer?
A. Debit retained earnings for $15,000
B. Credit retained earnings for $15,000
C. Debit retained earnings for $50,000
D. Credit retained earnings for $50,000
E. Debit investment in Stiller for $15,000
73. Compute income from Stiller on Leo's books for 2009.

A. $110,000
B. $100,000
C. $125,000
D. $85,000
E. $88,000

A. $140,000
B. $97,000
C. $125,000
D. $100,000
E. $112,000
Stark Company, a 90% owned subsidiary of Parker, Inc., sold land to Parker on May 1, 2009, for $80,000. The
land originally cost Stark $85,000. Stark reported net income of $200,000, $180,000 and $220,000 for 2009,
2010 and 2011, respectively. Parker sold the land it purchased from Stark in 2009 for $92,000 in 2011.

A. $80,000 gain
B. $80,000 loss
C. $5,000 gain
D. $5,000 loss
E. $85,000 loss
76. Which of the following will be included in a consolidation entry for 2009?
A. Debit loss for $5,000
B. Credit loss for $5,000
C. Credit land for $5,000
D. Debit gain for $5,000
C. Debit investment in subsidiary for $5,000
D. Credit investment in subsidiary for $5,000
E. Credit land for $5,000
78. Compute income from Stark reported on Parker's books for 2009.
A. $205,000
B. $200,000
C. $180,000
D. $175,500
E. $184,500
A. $185,000
B. $157,500
C. $166,500
D. $162,000
E. $180,000
80. Compute the consolidated gain or loss relating to the land for 2011.
A. $5,000 loss
B. $7,000 gain
C. $12,000 gain
D. $7,000 loss
E. $12,000 loss
81. Compute Parker's reported gain or loss relating to the land for 2011.
A. $12,000 gain
B. $5,000 loss
C. $12,000 loss
D. $7,000 gain
E. $7,000 loss
82. Compute Stark's reported gain or loss relating to the land for 2011.
A. $5,000 loss
B. $5,000 gain
C. $7,000 loss
D. $7,000 gain
E. $0
A. $204,300
B. $202,500
C. $193,500
D. $191,700
E. $225,000
Pepe, Incorporated acquired 60% of Devin Company on January 1, 2009. On that date Devin sold equipment to
Pepe for $45,000. The equipment had a cost of $120,000 and accumulated depreciation of $66,000 with a
remaining life of 9 years. Devin reported net income of $300,000 and $325,000 for 2009 and 2010, respectively.
Pepe uses the equity method to account for its investment in Devin.
84. What is the gain or loss on equipment reported by Devin for 2009?
A. $54,000 gain
B. $21,000 loss
C. $21,000 gain
D. $9,000 loss
E. $9,000 gain
85. What is the consolidated gain or loss on equipment for 2009?

A. $0
B. $9,000 gain
C. $9,000 loss
D. $21,000 gain
E. $21,000 loss
86. Compute the income from Devin reported on Pepe's books for 2009.
A. $174,600
B. $184,800
C. $172,000
D. $171,000
E. $180,600
A. $190,200
B. $196,000
C. $194,400
D. $187,000
E. $195,000
88. Compute the non-controlling interest in the net income of Devin for 2009.
A. $116,400
B. $120,400
C. $120,000
D. $123,200
E. $112,000
A. $126,800
B. $130,600
C. $122,000
D. $130,000
E. $129,600
90. For each of the following situations (1 - 10), select the correct entry (a - e) that would be required on a
consolidated worksheet.
(A.) Debit retained earnings.
(B.) Credit retained earnings.
(C.) Debit investment in subsidiary.
(D.) Credit investment in subsidiary.
(E.) None of the above.
___ 1. Upstream beginning inventory profit, using the initial value method.
___ 2. Downstream beginning inventory profit, using the initial value method.
___ 3. Upstream ending inventory profit, using the initial value method.
___ 4. Downstream ending inventory profit, using the initial value method.
___ 5. Upstream transfer of depreciable assets in the period after transfer where subsidiary recognizes a gain,
using the initial value method.
___ 6. Downstream transfer of depreciable assets in the period after transfer where parent recognizes a gain,
___ 7. Upstream transfer of land in the period after transfer where subsidiary recognizes a loss, using the initial
value method.
___ 8. Downstream transfer of land in the period after transfer where parent recognizes a loss, using the initial
value method.
___ 9. Income from subsidiary, using the equity method.
___ 10. Amortization of cost over book value, using the equity method.
91. On April 7, 2009, Pate Corp. sold land to Shannahan Co., its subsidiary. From a consolidated point of view,
when will the gain on this transfer actually be earned?
92. Throughout 2009, Cleveland Co. sold inventory to Leeward Co., its subsidiary. From a consolidated point of
view, when will the gain on this transfer be earned?
93. Varton Corp. acquired all of the voting common stock of Caleb Co. on January 1, 2009. Varton owned some
land with a book value of $84,000 that was sold to Caleb for its fair value of $120,000. How should this
transaction be accounted for by the consolidated entity?
94. During 2009, Edwards Co. sold inventory to its parent company, Forsyth Corp. Forsyth still owned all of the
inventory at the end of 2009. Why must the gross profit on the sale be deferred when consolidated financial
statements are prepared at the end of 2009?
95. How does a gain on an intercompany sale of equipment affect the calculation of a non-controlling interest?
96. How do upstream and downstream inventory transfers differ in their effect on a year-end consolidation?
97. How is the gain on an intercompany transfer of a depreciable asset realized?
98. Dithers Inc. acquired all of the common stock of Bumstead Corp. on January 1, 2009. During 2009,
Bumstead sold land to Dithers at a gain. No consolidation entry for the sale of the land was made at the end of
2009. What errors will this omission cause in the consolidated financial statements?
99. Why do intercompany transfers between the component companies of a business combination occur so
frequently?
100. Fraker, Inc. owns 90 percent of Richards, Inc. and bought $200,000 of Richards' inventory in 2009. The
transfer price was equal to 30 percent of the sales price. When preparing consolidated financial statements, what
amount of these sales is eliminated?
101. What is meant by unrealized inventory gains and how are they treated on a consolidation worksheet?
102. What is the impact on the non-controlling interest of a subsidiary when there are downstream transfers of
inventory between the parent and subsidiary companies?
103. How is the gain on an intercompany transfer of land realized?
104. What is the purpose of the adjustments to depreciation expense within the consolidation process when
there has been an intercompany transfer of a depreciable asset?
105. Tara Company holds 80 percent of the common stock of Stodd Inc. In the current year, Tara reports sales
of $5,000,000 and cost of goods sold of $3,500,000. For the same period, Stodd has sales of $500,000 and cost
of goods sold of $400,000. During the year, Stodd sold merchandise to Tara for $40,000 at a price based on the
normal markup. At the end of the year, Tara still possesses 20 percent of this inventory. Prepare the
consolidation entry to defer the unrealized gain.
106. King Corp. owns 85% of James Co. King uses the equity method to account for this investment. During
2009, King sells inventory to James for $500,000. The inventory originally cost King $420,000. At 12/31/09,
25% of the goods were still in James' inventory.
Required:
Prepare the Consolidation Entry TI and Consolidation Entry G for the consolidation worksheet.
107. Flintstone Inc. acquired all of Rubble Co. on January 1, 2009. Flintstone decided to use the initial value
method to account for this investment. During 2009, Flintstone sold to Rubble for $600,000 inventory with a
cost of $500,000. At the end of the year 30% of the goods were still in Rubble's inventory.
Required:
Prepare Consolidation Entry TI and Consolidation Entry G for the consolidation worksheet at 12/31/09.
108. Yoderly Co., a wholly owned subsidiary of Nelson Corp., sold goods to Nelson near the end of 2008. The
goods had cost Yoderly $105,000 and the selling price was $140,000. Nelson had not sold any of the goods by
the end of the year.
Required:
Prepare Consolidation Entry TI and Consolidation Entry G that are required for 2009.
109. Strayten Corp. is a wholly owned subsidiary of Quint Inc. Quint decided to use the initial value method to
account for this investment. During 2009, Strayten sold Quint goods which had cost $48,000. The selling price
was $64,000. Quint still had one-fourth of the goods on hand at the end of the year.
Required:
Prepare Consolidation Entry *G, which would have to be recorded at the end of 2010.
110. Hambly Corp. owned 80% of the voting common stock of Stroban Co. During 2009, Stroban sold a parcel
of land to Hambly. The land had a book value of $82,000 and was sold to Hambly for $145,000. Stroban's
reported net income for 2009 was $119,000.
Required:
What was the non-controlling interest's share of Stroban Co.'s net income?
111. McGraw Corp. owned all of the voting common stock of both Ritter Co. and Lawler Co. During 2009,
Ritter sold inventory to Lawler. The goods had cost Ritter $65,000 and they were sold to Lawler for $100,000.
At the end of 2009, Lawler still held 30% of the inventory.
Required:
How should the sale between Lawler and Ritter be accounted for by the consolidated entity?
Virginia Corp. owned all of the voting common stock of Stateside Co. Both companies use the perpetual
inventory method and Virginia decided to use the partial equity method to account for this investment. During
2009, Virginia made cash sales of $400,000 to Stateside. The gross profit rate was 30% of the selling price. By
the end of the year, Stateside had used 75% of the goods.
112. Prepare journal entries for Virginia and Stateside to record the sales/purchases during 2009.
113. Prepare the consolidation entries that should be made at the end of 2009.
114. Prepare any 2010 consolidation worksheet entries that would be required for this inventory transfer.
Several years ago Polar Inc. purchased an 80% interest in Icecap Co. The book values of Icecap's asset and
liability accounts at that time were considered to be equal to their fair values. Polar paid an amount
corresponding to the underlying book value of Icecap so that no allocations or goodwill resulted from the
purchase price.
The following selected account balances were from the individual financial records of these two companies as
of December 31, 2009:
115. Assume that Polar sold inventory to Icecap at a markup equal to 40% of cost. Intercompany transfers were
$126,000 in 2008 and $154,000 in 2009. Of this inventory, $39,200 of the 2008 transfers were retained and then
sold by Icecap in 2009 while $58,800 of the 2009 transfers were held until 2010.
Required:
On the consolidated financial statements for 2009, determine the balances that would appear for the following
accounts: (1) Cost of Goods Sold, (2) Inventory and (3) Non-controlling Interest in Subsidiary's Net Income. (If
you use a gross profit percentage, do not round the calculation.)
116. Assume that Icecap sold inventory to Polar at a markup equal to 40% of cost. Intercompany transfers were
sold by Polar in 2009 whereas $49,000 of the 2009 transfers were held until 2010.
Required:
117. Polar sold a building to Icecap on January 1, 2008 for $112,000, although the book value of this asset was
only $70,000 on that date. The building had a five-year remaining useful life and was to be depreciated using
the straight-line method with no salvage value.
Required:
accounts: (1) Buildings (net), (2) Operating expenses and (3) Non-controlling Interest in Subsidiary's Net
Income.
On January 1, 2009, Musial Corp. sold equipment to Matin Inc. (a wholly-owned subsidiary) for $168,000 in
cash. The equipment had originally cost $140,000 but had a book value of only $98,000 when transferred. On
that date, the equipment had a five-year remaining life. Depreciation expense was calculated using the
straight-line method.
Musial earned $308,000 in net income in 2009 (not including any investment income) while Matin reported
$126,000. Assume there is no amortization related to the original investment.
118. What is consolidated net income for 2009?
119. Assuming that Musial owned only 90% of Matin, what is consolidated net income for 2009?
120. Assuming that Musial owned only 90% of Matin and the equipment transfer had been upstream, what is
consolidated net income for 2009?
ch5 Key
1. On November 8, 2009, Power Corp. sold land to Wood Co., its wholly owned subsidiary. The land cost
$61,500 and was sold to Wood for $89,000. From the perspective of the combination, when is the gain on the
sale of the land realized?
A. Proportionately over a designated period of years
B. When Wood Co. sells the land to a third party
C. No gain can be recognized
D. As Wood uses the land
E. When Wood Co. begins using the land productively
Difficulty: Easy
Hoyle - Chapter 05 #1
2. Edgar Co. acquired 60% of Kindall Co. on January 1, 2009. During 2009, Edgar made several sales of
inventory to Kindall. The cost and selling price of the goods were $140,000 and $200,000, respectively. Kindall
still owned one-fourth of the goods at the end of 2009. Consolidated cost of goods sold for 2009 was
$2,140,000. How would consolidated cost of goods sold have differed if the inventory transfers had been for the
same amount and cost, but from Kindall to Edgar?
A. Consolidated cost of goods sold would have been $2,140,000
B. Consolidated cost of goods sold would have been $2,175,000
C. The effect on consolidated cost of goods sold cannot be predicted from the information provided
D. Consolidated cost of goods sold would have been reduced because of the non-controlling interest in the
subsidiary
E. Consolidated cost of goods sold would have been higher because of the non-controlling interest in the
subsidiary
Difficulty: Medium
3. On January 1, 2009, Race Corp. acquired 80% of the voting common stock of Gallow Inc. During the year,
Race sold to Gallow for $450,000 goods which cost $330,000. Gallow still owned 15% of the goods at
year-end. Gallow's reported net income was $204,000 and Race's net income was $806,000. Race decided to
use the equity method to account for this investment. What was the non-controlling interest's share of
consolidated net income?
A. $37,200
B. $22,800
C. $30,900
D. $32,900
E. $40,800
Difficulty: Easy
4. Webb Co. acquired 100% of Rand Inc. on January 5, 2009. During 2009, Webb sold Rand for $2,400,000
goods that cost $1,800,000. Rand still owned 40% of the goods at the end of the year. Cost of goods sold was
$10,800,000 for Webb and $6,400,000 for Rand. What was consolidated cost of goods sold?
A. $17,200,000
B. $15,040,000
C. $14,800,000
D. $16,960,000
E. $14,560,000
Difficulty: Hard
5. Gentry Inc. acquired 100% of Gaspard Farms on January 5, 2009. During 2009, Gentry sold Gaspard Farms
for $625,000 goods which had cost $425,000. Gaspard Farms still owned 12% of the goods at the end of the
year. In 2010, Gentry sold goods with a cost of $800,000 to Gaspard Farms for $1,000,000 and Gaspard Farms
still owned 10% of the goods at year-end. For 2010, cost of goods sold was $1,200,000 for Gaspard Farms and
$5,400,000 for Gentry. What was consolidated cost of goods sold for 2010?
A. $6,600,000
B. $6,596,000
C. $5,620,000
D. $5,596,000
E. $5,625,000
Difficulty: Hard
6. X-Beams Inc. owned 70% of the voting common stock of Kent Corp. During 2009, Kent made several sales
of inventory to X-Beams. The total selling price was $180,000 and the cost was $100,000. At the end of the
year, 20% of the goods were still in X-Beams' inventory. Kent's reported net income was $300,000. What was
the non-controlling interest in Kent's net income?
A. $90,000
B. $85,200
C. $54,000
D. $94,800
E. $86,640
Difficulty: Medium
7. Justings Co. owned 80% of Evana Corp. During 2009, Justings sold to Evana land with a book value of
$48,000. The selling price was $70,000. In its accounting records, Justings should
A. Not recognize a gain on the sale of the land since it was made to a related party
B. Recognize a gain of $17,600
C. Defer recognition of the gain until Evana sells the land to a third party
D. Recognize a gain of $8,000
E. Recognize a gain of $22,000
Difficulty: Medium
8. Norek Corp. owned 70% of the voting common stock of Thelma Co. On January 2, 2009, Thelma sold a
parcel of land to Norek. The land had a book value of $32,000 and was sold to Norek for $45,000. Thelma's
reported net income for 2009 was $119,000. What is the non-controlling interest's share of Thelma's net
income?
A. $35,700
B. $31,800
C. $39,600
D. $22,200
E. $26,100
Difficulty: Medium
9. Clemente Co. owned all of the voting common stock of Snider Co. On January 2, 2009, Clemente sold some
equipment to Snider for $125,000. The equipment had cost $140,000. At the time of the sale, the balance in
accumulated depreciation was $40,000. The equipment had a remaining useful life of five years and a $0
salvage value. Straight-line depreciation is used by both Clemente and Snider. At what amount should the
equipment (net of depreciation) be included on the consolidated balance sheet dated December 31, 2009?
A. $100,000
B. $95,000
C. $75,000
D. $80,000
E. $85,000
Difficulty: Medium
10. During 2009, Von Co. sold inventory to its wholly-owned subsidiary, Lord Co. The inventory cost $30,000
and was sold to Lord for $44,000. From the perspective of the combination, when is the $14,000 gain realized?
A. When the goods are sold to a third party by Lord
B. When Lord pays Von for the goods
C. When Von sold the goods to Lord
D. When the goods are used by Lord
E. No gain can be recognized since the transaction was between related parties
Difficulty: Easy
11. Bauerly Co. owned 70% of the voting common stock of Devin Co. During 2009, Devin made frequent sales
of inventory to Bauerly. There were unrealized gains of $40,000 in the beginning inventory and $25,000 at the
end of the year. Devin reported net income of $137,000 for 2009. Bauerly decided to use the equity method to
account for the investment. What is the non-controlling interest's share of Devin's net income for 2009?
A. $41,100
B. $33,600
C. $21,600
D. $45,600
E. $36,600
Difficulty: Medium
12. Chain Co. owned all of the voting common stock of Shannon Corp. The corporations' balance sheets dated
December 31, 2009, include the following balances for land: for Chain-$416,000 and for Shannon-$256,000.
On the original date of acquisition, the book value of Shannon's land was equal to its fair value. On April 4,
2010, Chain sold to Shannon a parcel of land with a book value of $65,000. The selling price was $83,000.
There were no other transactions which affected the companies' land accounts during 2010. What is the
consolidated balance for land on the 2010 balance sheet?
A. $672,000
B. $690,000
C. $755,000
D. $737,000
E. $654,000
Difficulty: Medium
13. Gibson Corp. owned a 90% interest in Sparis Co. Sparis frequently made sales of inventory to Gibson. The
sales, which include a markup over cost of 25%, were $420,000 in 2009 and $500,000 in 2010. At the end of
each year, Gibson still owned 30% of the goods. Net income for Sparis was $912,000 during 2010. What was
the non-controlling interest's share of Sparis' net income for 2010?
A. $85,680
B. $90,600
C. $90,720
D. $91,680
E. $91,800
Difficulty: Hard
14. On January 1, 2009, Payton Co. sold equipment to its subsidiary, Starker Corp., for $115,000. The
equipment had cost $125,000 and the balance in accumulated depreciation was $45,000. The equipment had an
estimated remaining useful life of eight years and $0 salvage value. Both companies use straight-line
depreciation. On their separate 2009 income statements, Payton and Starker reported depreciation expense of
$84,000 and $60,000, respectively. The amount of depreciation expense on the consolidated income statement
for 2009 would have been
A. $144,000
B. $148,375
C. $109,000
D. $134,000
E. $139,625
Difficulty: Medium
15. Yukon Co. acquired 75% percent of the voting common stock of Ontario Corp. on January 1, 2009. During
the year, Yukon made sales of inventory to Ontario. The inventory cost Yukon $260,000 and was sold to
Ontario for $390,000. Ontario still had $60,000 of the goods in its inventory at the end of the year. The amount
of unrealized intercompany profit that should be eliminated in the consolidation process at the end of 2009 is
A. $15,000
B. $20,000
C. $32,500
D. $30,000
E. $110,000
Difficulty: Medium
16. Prince Corp. owned 80% of Kile Corp.'s common stock. During October 2009, Kile sold merchandise to
Prince for $140,000. At December 31, 2009, 50% of this merchandise remained in Prince's inventory. For 2009,
gross profit percentages were 30% of sales for Prince and 40% of sales for Kile. The amount of unrealized
intercompany profit in ending inventory at December 31, 2009 that should be eliminated in the consolidation
process is
A. $28,000
B. $56,000
C. $22,400
D. $21,000
E. $42,000
Difficulty: Medium
Pot Co. holds 90% of the common stock of Skillet Co. During 2009, Pot reported sales of $1,120,000 and cost
of goods sold of $840,000. For this same period, Skillet had sales of $420,000 and cost of goods sold of
$252,000. Also during 2009, Pot sold merchandise to Skillet for $140,000. The subsidiary still possesses 40%
of this inventory at the end of 2009. Pot had established the transfer price based on its normal markup.
Hoyle - Chapter 05
17. What are consolidated sales and cost of goods sold?

A. $1,400,000 and $952,000
B. $1,400,000 and $966,000
C. $1,540,000 and $1,078,000
D. $1,400,000 and $1,022,000
E. $1,540,000 and $1,092,000
Difficulty: Hard
18. Assuming that the transfers were from Skillet Co. to Pot Co., what are consolidated sales and cost of goods
sold?
A. $1,400,000 and $952,000
B. $1,400,000 and $966,000
C. $1,540,000 and $1,078,000
D. $1,400,000 and $974,400
E. $1,540,000 and $1,092,000
Difficulty: Hard
19. Dalton Corp. owned 70% of the outstanding common stock of Shrugs Inc. On January 1, 2007, Dalton
acquired a building with a ten-year life for $420,000. No salvage value was anticipated and the building was to
be depreciated on the straight-line basis. On January 1, 2009, Dalton sold this building to Shrugs for $392,000.
At that time, the building had a remaining life of eight years but still no expected salvage value. In preparing
financial statements for 2009, how does this transfer affect the calculation of Dalton's share of consolidated net
income?
A. Consolidated net income must be reduced by $44,800
B. Consolidated net income must be reduced by $50,400
C. Consolidated net income must be reduced by $49,000
D. Consolidated net income must be reduced by $56,000
E. Consolidated net income must be reduced by $53,200
Difficulty: Medium
On January 1, 2009, Pride, Inc. bought 80% of the outstanding voting common stock of Strong Corp. for
$364,000. Of this payment, $28,000 was allocated to equipment (with a five-year life) that had been
undervalued on Strong's books by $35,000. Any remaining excess was attributable to goodwill which has not
been impaired.
As of December 31, 2009, before preparing the consolidated worksheet, the financial statements appeared as
follows:
During 2009, Pride bought inventory for $112,000 and sold it to Strong for $140,000. Only half of this purchase
had been paid for by Strong by the end of the year. 60% of these goods were still in the company's possession
on December 31.
Hoyle - Chapter 05
20. What is the total of consolidated revenues?

A. $700,000
B. $644,000
C. $588,000
D. $560,000
E. $840,000
Difficulty: Medium
21. What is the total of consolidated operating expenses?

A. $42,000
B. $47,600
C. $53,200
D. $48,000
E. $36,400
Difficulty: Medium
22. What is the total of consolidated cost of goods sold?

A. $196,000
B. $212,800
C. $184,800
D. $203,000
E. $168,000
Difficulty: Medium
23. What is the consolidated total of non-controlling interest appearing on the balance sheet?
A. $100,800
B. $97,440
C. $93,800
D. $98,840
E. $101,900
Difficulty: Medium
24. What is the consolidated total for equipment (net) at December 31, 2009?
A. $952,000
B. $1,058,400
C. $1,069,600
D. $1,064,000
E. $1,066,800
Difficulty: Medium
25. What is the consolidated total for inventory at December 31, 2009?
A. $336,000
B. $280,000
C. $364,000
D. $347,200
E. $349,300
Difficulty: Medium
Strickland Company sells inventory to its parent, Carter Company, at a profit during 2009. Select the correct
answer.
Hoyle - Chapter 05
C. Inventory
Difficulty: Easy
C. Inventory
Difficulty: Easy
C. Inventory
Difficulty: Medium
C. Inventory
Difficulty: Medium
Walsh Company sells inventory to its subsidiary, Fisher Company, at a profit during 2009. Walsh uses the
equity method to account for its investment in Fisher.
Hoyle - Chapter 05
C. Inventory
Difficulty: Easy
C. Inventory
Difficulty: Easy
C. Inventory
D. Investment in Fisher Company
Difficulty: Medium
C. Inventory
Difficulty: Medium
A. Income from subsidiary will be lower by the amount of the ending inventory profit multiplied by the
B. Income from subsidiary will be higher by the amount of the ending inventory profit multiplied by the
C. Income from subsidiary will be reduced for downstream ending inventory profit but not for upstream profit,
D. Income from subsidiary will be reduced for upstream ending inventory profit but not for downstream profit,
E. Income from subsidiary will be the same for upstream and downstream profit
Difficulty: Hard
A. Income from subsidiary will be lower by the amount of the beginning inventory profits multiplied by the
B. Income from subsidiary will be higher by the amount of the beginning inventory profits multiplied by the
C. Income from subsidiary will be reduced for downstream ending inventory profits but not for upstream
D. Income from subsidiary will be reduced for upstream ending inventory profits but not for downstream
E. Income from subsidiary will be the same for upstream and downstream profits
Difficulty: Hard
36. Which of the following statements is true regarding inventory transfers between a parent and its subsidiary,
using the initial value method?
A. The sale of merchandise between a parent and its subsidiary represents an arm's-length transaction and thus
provides the basis for the recognition of profit on such transfers
B. Profits on upstream transfers associated with the parent's ending inventory are subtracted from subsidiary net
procedure is inappropriate because all the intercompany transactions unsold at year-end may not be sold in the
next year
C. Profits on upstream transfers associated with the parent's ending inventory are subtracted from subsidiary net
procedure is appropriate even if all the intercompany transactions unsold at year-end may not be sold in the next
year
D. Merchandise transfers from a parent to its subsidiary that have not been sold to unaffiliated parties should be
included in consolidated inventory at their transfer price
E. Non-controlling interest in subsidiary's net income should not be reduced for upstream or downstream ending
inventory profits
Difficulty: Medium
37. Which of the following statements is true regarding an intercompany sale of land?
A. A loss is always recognized but a gain is eliminated on a consolidated income statement
B. A loss and a gain are always eliminated on a consolidated income statement
C. A loss and a gain are always recognized on a consolidated income statement
D. A gain is always recognized but a loss is eliminated on a consolidated income statement
E. A gain or loss is eliminated by adjusting stockholders' equity through comprehensive income
Difficulty: Easy
38. Parent sold land to its subsidiary for a gain in 2007. The subsidiary sold the land externally for a gain in
2010. Which of the following statements is true?
A. A gain will be reported on the consolidated income statement in 2007
B. A gain will be reported on the consolidated income statement in 2010
C. No gain will be reported on the 2010 consolidated income statement
D. Only the parent company will report a gain in 2010
E. The subsidiary will report a gain in 2007
Difficulty: Easy
39. An intercompany sale took place whereby the transfer price exceeded the book value of a depreciable asset.
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
D. A worksheet entry is made with a debit to retained earnings for a downstream transfer
Difficulty: Medium
40. An intercompany sale took place whereby the book value exceeded the transfer price of a depreciable asset.
A. A worksheet entry is made with a debit to retained earnings for an upstream transfer
B. A worksheet entry is made with a credit to retained earnings for an upstream 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
Difficulty: Medium
41. An intercompany sale took place whereby the transfer price was less than 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 investment in subsidiary for an upstream transfer
B. A worksheet entry is made with a debit to investment in subsidiary for a downstream transfer
C. A worksheet entry is made with a credit to investment in subsidiary for a downstream transfer when the
D. A worksheet entry is made with a debit to retained earnings for an upstream transfer
Difficulty: Hard
42. Which of the following statements is true concerning an intercompany transfer of a depreciable asset?
A. Non-controlling interest in subsidiary's net income is never affected by a gain on the transfer
B. Non-controlling interest in subsidiary's net income is always affected by a gain on the transfer
C. Non-controlling interest in subsidiary's net income is affected by a downstream gain only
D. Non-controlling interest in subsidiary's net income is affected only when the transfer is upstream
E. Non-controlling interest in subsidiary's net income is increased by an upstream gain in the year of transfer
Difficulty: Medium
Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on
selling price. The following data are available pertaining to intercompany purchases. Gargiulo was acquired on
January 1, 2009.
Assume the equity method is used. The following data are available pertaining to Gargiulo's income and
dividends.
Hoyle - Chapter 05
A. $63,000
B. $62,730
C. $63,270
D. $70,000
E. $62,700
Difficulty: Medium
A. $76,500
B. $77,130
C. $75,870
D. $75,600
E. $75,800
Difficulty: Medium
A. $84,600
B. $84,375
C. $83,925
D. $84,825
E. $84,850
Difficulty: Medium
A. $6,970
B. $7,000
C. $7,030
D. $6,270
E. $6,230
Difficulty: Medium
A. $8,500
B. $8,570
C. $8,430
D. $8,400
E. $7,580
Difficulty: Medium
A. $9,400
B. $9,375
C. $9,425
D. $9,325
E. $8,485
Difficulty: Medium
A. $300
B. $240
C. $2,000
D. $1,600
E. $270
Difficulty: Medium
A. $1,000
B. $800
C. $3,000
D. $2,400
E. $900
Difficulty: Medium
A. $600
B. $750
C. $3,760
D. $3,000
E. $675
Difficulty: Medium
A. $0
B. $1,600
C. $300
D. $240
E. $270
Difficulty: Medium
A. $240
B. $300
C. $2,000
D. $1,600
E. $270
Difficulty: Medium
A. $3,000
B. $2,400
C. $1,000
D. $800
E. $900
Difficulty: Medium
Patti Company holds 80% of the common stock of Shannon, Inc. In the current year, Patti reports sales of
$10,000,000 and cost of goods sold of $7,500,000. For the same period, Shannon has sales of $200,000 and cost
of goods sold of $160,000. During the year, Patti sold merchandise to Shannon for $60,000 at a price based on
the normal markup. At the end of the year, Shannon still possesses 30 percent of this inventory.
Hoyle - Chapter 05
55. Compute consolidated sales.

A. $10,000,000
B. $10,126,000
C. $10,140,000
D. $10,200,000
E. $10,260,000
Difficulty: Medium
56. Compute consolidated cost of goods sold.

A. $7,500,000
B. $7,600,000
C. $7,615,000
D. $7,604,500
E. $7,660,000
Difficulty: Medium
57. Assume the same information, except Shannon sold inventory to Patti. Compute consolidated sales.
A. $10,000,000
B. $10,126,000
C. $10,140,000
D. $10,200,000
E. $10,260,000
Difficulty: Medium
On April 1, 2009 Wilson Company, a 90% owned subsidiary of Simon Company, bought equipment from
Simon for $68,250. On January 1, 2009, Simon realized that the useful life of the equipment was longer than
originally anticipated, at ten remaining years. The equipment had an original cost to Simon of $80,000 and a
book value of $50,000 with a 10-year remaining life as of January 1, 2009.
The following data are available pertaining to Wilson's income and dividends:
Hoyle - Chapter 05
58. Compute the gain on transfer of equipment reported by Simon for 2009.
A. $19,500
B. $18,250
C. $11,750
D. $38,250
E. $37,500
Difficulty: Hard
A. $1,950
B. $1,825
C. $1,500
D. $2,000
E. $5,250
Difficulty: Hard
A. $1,950
B. $1,825
C. $2,000
D. $1,500
E. $7,000
Difficulty: Medium
A. $1,925
B. $1,825
C. $2,000
D. $1,500
E. $7,000
Difficulty: Medium
A. $72,000
B. $90,000
C. $73,575
D. $73,800
E. $72,500
Difficulty: Hard
A. $108,000
B. $110,000
C. $106,000
D. $109,825
E. $109,800
Difficulty: Hard
A. $118,825
B. $115,000
C. $117,000
D. $119,000
E. $118,800
Difficulty: Hard
On January 1, 2009, Smeder Company, an 80% owned subsidiary of Collins, Inc., transferred equipment with a
10-year life (six of which remain with no salvage value) to Collins in exchange for $84,000 cash. At the date of
transfer, Smeder's records carried the equipment at a cost of $120,000 less accumulated depreciation of
$48,000. Straight-line depreciation is used. Smeder reported net income of $28,000 and $32,000 for 2009 and
2010, respectively.
Hoyle - Chapter 05
65. Compute the gain recognized by Smeder Company relating to the equipment for 2009.
A. $36,000
B. $34,000
C. $12,000
D. $10,000
E. $0
Difficulty: Medium

A. $12,400
B. $14,400
C. $11,200
D. $12,800
E. $18,000
Difficulty: Medium

A. $27,600
B. $23,600
C. $27,200
D. $24,000
E. $34,000
Difficulty: Medium
68. For consolidation purposes, what net debit or credit will be made in 2009 relating to the equipment
transfer?
A. Debit accumulated depreciation, $46,000
B. Debit accumulated depreciation, $48,000
C. Credit accumulated depreciation, $48,000
D. Credit accumulated depreciation, $46,000
E. Debit accumulated depreciation, $2,000
Difficulty: Medium
69. What is the net effect on consolidated net income in 2009, before allocation to controlling and
non-controlling interests, due to the equipment transfer?
A. Increase $2,000
B. Decrease $12,000
C. Decrease $10,000
D. Decrease $14,000
E. Increase $10,000
Difficulty: Medium
Stiller Company, an 80% owned subsidiary of Leo Company, purchased land from Leo on March 1, 2009, for
$75,000. The land originally cost Leo $60,000. Stiller reported net income of $125,000 and $140,000 for 2009
and 2010, respectively. Leo uses the equity method to account for its investment.
Hoyle - Chapter 05

A. $15,000 loss
B. $15,000 gain
C. $50,000 loss
D. $50,000 gain
E. $65,000 gain
Difficulty: Easy
71. On a consolidation worksheet, what adjustment would be made for 2009 regarding the land transfer?
A. Debit gain for $50,000
B. Credit gain for $50,000
C. Debit land for $15,000
D. Credit land for $15,000
Difficulty: Easy
72. On a consolidation worksheet, having used the equity method, what adjustment would be made for 2010
regarding the land transfer?
C. Debit retained earnings for $50,000
D. Credit retained earnings for $50,000
E. Debit investment in Stiller for $15,000
Difficulty: Easy

A. $110,000
B. $100,000
C. $125,000
D. $85,000
E. $88,000
Difficulty: Medium

A. $140,000
B. $97,000
C. $125,000
D. $100,000
E. $112,000
Difficulty: Easy
Stark Company, a 90% owned subsidiary of Parker, Inc., sold land to Parker on May 1, 2009, for $80,000. The
land originally cost Stark $85,000. Stark reported net income of $200,000, $180,000 and $220,000 for 2009,
2010 and 2011, respectively. Parker sold the land it purchased from Stark in 2009 for $92,000 in 2011.
Hoyle - Chapter 05

A. $80,000 gain
B. $80,000 loss
C. $5,000 gain
D. $5,000 loss
E. $85,000 loss
Difficulty: Easy
A. Debit loss for $5,000
B. Credit loss for $5,000
C. Credit land for $5,000
D. Debit gain for $5,000
Difficulty: Easy
C. Debit investment in subsidiary for $5,000
D. Credit investment in subsidiary for $5,000
E. Credit land for $5,000
Difficulty: Easy
A. $205,000
B. $200,000
C. $180,000
D. $175,500
E. $184,500
Difficulty: Medium
A. $185,000
B. $157,500
C. $166,500
D. $162,000
E. $180,000
Difficulty: Medium
80. Compute the consolidated gain or loss relating to the land for 2011.
A. $5,000 loss
B. $7,000 gain
C. $12,000 gain
D. $7,000 loss
E. $12,000 loss
Difficulty: Hard
81. Compute Parker's reported gain or loss relating to the land for 2011.
A. $12,000 gain
B. $5,000 loss
C. $12,000 loss
D. $7,000 gain
E. $7,000 loss
Difficulty: Medium
82. Compute Stark's reported gain or loss relating to the land for 2011.
A. $5,000 loss
B. $5,000 gain
C. $7,000 loss
D. $7,000 gain
E. $0
Difficulty: Medium
A. $204,300
B. $202,500
C. $193,500
D. $191,700
E. $225,000
Difficulty: Hard
Pepe, Incorporated acquired 60% of Devin Company on January 1, 2009. On that date Devin sold equipment to
Pepe for $45,000. The equipment had a cost of $120,000 and accumulated depreciation of $66,000 with a
remaining life of 9 years. Devin reported net income of $300,000 and $325,000 for 2009 and 2010, respectively.
Pepe uses the equity method to account for its investment in Devin.
Hoyle - Chapter 05
84. What is the gain or loss on equipment reported by Devin for 2009?
A. $54,000 gain
B. $21,000 loss
C. $21,000 gain
D. $9,000 loss
E. $9,000 gain
Difficulty: Medium
85. What is the consolidated gain or loss on equipment for 2009?

A. $0
B. $9,000 gain
C. $9,000 loss
D. $21,000 gain
E. $21,000 loss
Difficulty: Easy
A. $174,600
B. $184,800
C. $172,000
D. $171,000
E. $180,600
Difficulty: Medium
A. $190,200
B. $196,000
C. $194,400
D. $187,000
E. $195,000
Difficulty: Medium
A. $116,400
B. $120,400
C. $120,000
D. $123,200
E. $112,000
Difficulty: Medium
A. $126,800
B. $130,600
C. $122,000
D. $130,000
E. $129,600
Difficulty: Medium
90. For each of the following situations (1 - 10), select the correct entry (a - e) that would be required on a
consolidated worksheet.
(A.) Debit retained earnings.
(B.) Credit retained earnings.
(C.) Debit investment in subsidiary.
(D.) Credit investment in subsidiary.
(E.) None of the above.
___ 1. Upstream beginning inventory profit, using the initial value method.
___ 2. Downstream beginning inventory profit, using the initial value method.
___ 3. Upstream ending inventory profit, using the initial value method.
___ 4. Downstream ending inventory profit, using the initial value method.
___ 5. Upstream transfer of depreciable assets in the period after transfer where subsidiary recognizes a gain,
___ 6. Downstream transfer of depreciable assets in the period after transfer where parent recognizes a gain,
___ 7. Upstream transfer of land in the period after transfer where subsidiary recognizes a loss, using the initial
value method.
___ 8. Downstream transfer of land in the period after transfer where parent recognizes a loss, using the initial
value method.
___ 9. Income from subsidiary, using the equity method.
___ 10. Amortization of cost over book value, using the equity method.
(1) A; (2) A; (3) E; (4) E; (5) A; (6) A; (7) B; (8) B; (9) D; (10) C
Difficulty: Hard
91. On April 7, 2009, Pate Corp. sold land to Shannahan Co., its subsidiary. From a consolidated point of view,
when will the gain on this transfer actually be earned?
The gain is earned when Shannahan sells the land to a third party.
Difficulty: Easy
92. Throughout 2009, Cleveland Co. sold inventory to Leeward Co., its subsidiary. From a consolidated point of
view, when will the gain on this transfer be earned?
The gain is earned when Leeward uses the goods or sells them to a third party.
Difficulty: Easy
93. Varton Corp. acquired all of the voting common stock of Caleb Co. on January 1, 2009. Varton owned some
land with a book value of $84,000 that was sold to Caleb for its fair value of $120,000. How should this
transaction be accounted for by the consolidated entity?
Caleb and Varton are in substance one entity, although in legal form they are separate. The "sale" of land by
Varton should be regarded as a transfer of assets within the entity. No gain on the transfer should be recognized
on the consolidated financial statements since the earnings process is not complete. Because Caleb recognized a
gain on its income statement, the consolidation process must eliminate the gain. Also, Caleb's separate balance
sheet showed the land at an amount greater than its cost to the combined entity. The consolidation entry must
reduce land to its cost.
Difficulty: Easy
94. During 2009, Edwards Co. sold inventory to its parent company, Forsyth Corp. Forsyth still owned all of the
inventory at the end of 2009. Why must the gross profit on the sale be deferred when consolidated financial
statements are prepared at the end of 2009?
A sale of inventory by a subsidiary to its parent is more accurately understood as a transfer within the entity.
Since Forsyth still owned the inventory at the end of the year, the earnings process was not yet complete. If
recognition of the gross profit on the transfer was allowed, the parent would be able to manipulate consolidated
net income and consolidated net assets by transferring inventory between parent and subsidiary.
Difficulty: Medium
95. How does a gain on an intercompany sale of equipment affect the calculation of a non-controlling interest?
If the equipment is sold by the parent to the subsidiary, the sale of the equipment does not affect the calculation
of the non-controlling interest's share of the subsidiary's net income. When the sale of equipment is upstream,
the gain on the sale must be subtracted from the subsidiary's income and according to SFAS 160, this
elimination may be allocated between the controlling interest and non-controlling interest share of the
subsidiary's earnings.
Difficulty: Medium
96. How do upstream and downstream inventory transfers differ in their effect on a year-end consolidation?
If the sale of inventory is downstream (from parent to subsidiary), any unrealized gain on the sale does not
affect the calculation of non-controlling interest. When the sale is upstream (from the subsidiary to the parent),
the gain on the sale is associated with the subsidiary. The gain on goods that the parent still owns should be
deducted from the subsidiary's income and according to SFAS 160, this elimination may be allocated between
the controlling interest and the non-controlling interest's share of the subsidiary's earnings.
Difficulty: Medium
97. How is the gain on an intercompany transfer of a depreciable asset realized?

The gain on an intercompany transfer of a depreciable asset may be realized in one of two ways: (1) through the
use of the asset in operations or (2) through the sale of the asset to an independent third party.
Difficulty: Easy
98. Dithers Inc. acquired all of the common stock of Bumstead Corp. on January 1, 2009. During 2009,
Bumstead sold land to Dithers at a gain. No consolidation entry for the sale of the land was made at the end of
2009. What errors will this omission cause in the consolidated financial statements?
Consolidation Entry for 2009
This omission causes both the amounts for Land and Gain on Sale of Land to be overstated in the consolidated
financial statements and ultimately, Total Assets and Ending Retained Earnings to be overstated as well. Also,
according to SFAS 160, the correction for gain may be allocated to the non-controlling interest share of
subsidiary earnings and the non-controlling interest balance on the consolidated balance sheet.
Difficulty: Medium
99. Why do intercompany transfers between the component companies of a business combination occur so
frequently?
"One reason for the significant volume and frequency of intercompany transfers is that many business
combinations are specifically organized so that the companies can provide products for each other. This design
is intended to benefit the business combination as a whole because of the economies provided by vertical
integration. In effect, more profit can often be generated by the combination if one member is able to buy from
another rather than from an outside party".
Difficulty: Medium
100. Fraker, Inc. owns 90 percent of Richards, Inc. and bought $200,000 of Richards' inventory in 2009. The
transfer price was equal to 30 percent of the sales price. When preparing consolidated financial statements, what
amount of these sales is eliminated?
Regardless of the ownership percentage or the markup, the $200,000 was simply an intercompany asset transfer
for consolidation purposes. Thus, within the consolidation process, the entire $200,000 should be eliminated
from both the Sales and the Purchases (Inventory) accounts.
Difficulty: Easy
101. What is meant by unrealized inventory gains and how are they treated on a consolidation worksheet?
"In intercompany transactions, a transfer price is often established that exceeds the cost of the inventory. Hence,
the seller is recording a gain on its books that, from the perspective of the business combination as a whole,
remains unrealized until the asset is consumed or sold to an outside party. Any unrealized gain on merchandise
still being held by the buyer must be eliminated whenever consolidated financial statements are produced. For
the year of transfer, this consolidation procedure is carried out by removing the unrealized gain from the
inventory account on the balance sheet and from the ending inventory balance within cost of goods sold. In the
year following the transfer (if the goods are resold or consumed), the unrealized gain must again be eliminated
within the consolidation process. This second reduction is made on the worksheet to the beginning inventory
component of cost of goods sold as well as to the beginning retained earnings balance of the original seller. The
gain is being moved into the year of realization. If the transfer was downstream in direction and the parent
company has applied the equity method, the adjustment in the subsequent year must be made to the equity in
subsidiary earnings account rather than to retained earnings".
Difficulty: Medium
102. What is the impact on the non-controlling interest of a subsidiary when there are downstream transfers of
inventory between the parent and subsidiary companies?
None.
Difficulty: Easy
103. How is the gain on an intercompany transfer of land realized?

The gain on an intercompany transfer of land is realized through the sale of the asset to an independent third
party. The gain is deferred until that time.
Difficulty: Easy
104. What is the purpose of the adjustments to depreciation expense within the consolidation process when
there has been an intercompany transfer of a depreciable asset?
"Depreciable assets are often transferred between the members of a business combination at amounts in excess
of book value. The buyer will then compute depreciation expense based on this inflated transfer price rather
than on an historical cost basis. From the perspective of the business combination, depreciation should be
calculated solely on historical cost figures. Thus, within the consolidation process for each period, adjustment of
the depreciation (being recorded by the buyer) is necessary to reduce the expense to a cost based figure".
Difficulty: Medium
105. Tara Company holds 80 percent of the common stock of Stodd Inc. In the current year, Tara reports sales
of $5,000,000 and cost of goods sold of $3,500,000. For the same period, Stodd has sales of $500,000 and cost
of goods sold of $400,000. During the year, Stodd sold merchandise to Tara for $40,000 at a price based on the
normal markup. At the end of the year, Tara still possesses 20 percent of this inventory. Prepare the
consolidation entry to defer the unrealized gain.
Difficulty: Medium
106. King Corp. owns 85% of James Co. King uses the equity method to account for this investment. During
2009, King sells inventory to James for $500,000. The inventory originally cost King $420,000. At 12/31/09,
25% of the goods were still in James' inventory.
Required:
Prepare the Consolidation Entry TI and Consolidation Entry G for the consolidation worksheet.
Difficulty: Medium
107. Flintstone Inc. acquired all of Rubble Co. on January 1, 2009. Flintstone decided to use the initial value
method to account for this investment. During 2009, Flintstone sold to Rubble for $600,000 inventory with a
cost of $500,000. At the end of the year 30% of the goods were still in Rubble's inventory.
Required:
Prepare Consolidation Entry TI and Consolidation Entry G for the consolidation worksheet at 12/31/09.
Difficulty: Medium
108. Yoderly Co., a wholly owned subsidiary of Nelson Corp., sold goods to Nelson near the end of 2008. The
goods had cost Yoderly $105,000 and the selling price was $140,000. Nelson had not sold any of the goods by
the end of the year.
Required:
Prepare Consolidation Entry TI and Consolidation Entry G that are required for 2009.
Difficulty: Medium
109. Strayten Corp. is a wholly owned subsidiary of Quint Inc. Quint decided to use the initial value method to
account for this investment. During 2009, Strayten sold Quint goods which had cost $48,000. The selling price
was $64,000. Quint still had one-fourth of the goods on hand at the end of the year.
Required:
Prepare Consolidation Entry *G, which would have to be recorded at the end of 2010.
Difficulty: Medium
110. Hambly Corp. owned 80% of the voting common stock of Stroban Co. During 2009, Stroban sold a parcel
of land to Hambly. The land had a book value of $82,000 and was sold to Hambly for $145,000. Stroban's
reported net income for 2009 was $119,000.
Required:
What was the non-controlling interest's share of Stroban Co.'s net income?
Difficulty: Medium
111. McGraw Corp. owned all of the voting common stock of both Ritter Co. and Lawler Co. During 2009,
Ritter sold inventory to Lawler. The goods had cost Ritter $65,000 and they were sold to Lawler for $100,000.
At the end of 2009, Lawler still held 30% of the inventory.
Required:
How should the sale between Lawler and Ritter be accounted for by the consolidated entity?
Lawler and Ritter are related parties since they are both part of a combined entity. The following Consolidation
Entries should be prepared:
These entries (1) eliminate the sale from the consolidated income statement, (2) decrease cost of goods sold and
(3) reduce consolidated inventory to its cost to the combined entity.
Difficulty: Medium
Virginia Corp. owned all of the voting common stock of Stateside Co. Both companies use the perpetual
inventory method and Virginia decided to use the partial equity method to account for this investment. During
2009, Virginia made cash sales of $400,000 to Stateside. The gross profit rate was 30% of the selling price. By
the end of the year, Stateside had used 75% of the goods.
Hoyle - Chapter 05
112. Prepare journal entries for Virginia and Stateside to record the sales/purchases during 2009.
Difficulty: Easy
113. Prepare the consolidation entries that should be made at the end of 2009.
Difficulty: Medium
114. Prepare any 2010 consolidation worksheet entries that would be required for this inventory transfer.
Difficulty: Medium
Several years ago Polar Inc. purchased an 80% interest in Icecap Co. The book values of Icecap's asset and
liability accounts at that time were considered to be equal to their fair values. Polar paid an amount
corresponding to the underlying book value of Icecap so that no allocations or goodwill resulted from the
purchase price.
The following selected account balances were from the individual financial records of these two companies as
of December 31, 2009:
Hoyle - Chapter 05
115. Assume that Polar sold inventory to Icecap at a markup equal to 40% of cost. Intercompany transfers were
sold by Icecap in 2009 while $58,800 of the 2009 transfers were held until 2010.
Required:
Difficulty: Medium
116. Assume that Icecap sold inventory to Polar at a markup equal to 40% of cost. Intercompany transfers were
sold by Polar in 2009 whereas $49,000 of the 2009 transfers were held until 2010.
Required:
Difficulty: Medium
117. Polar sold a building to Icecap on January 1, 2008 for $112,000, although the book value of this asset was
only $70,000 on that date. The building had a five-year remaining useful life and was to be depreciated using
the straight-line method with no salvage value.
Required:
accounts: (1) Buildings (net), (2) Operating expenses and (3) Non-controlling Interest in Subsidiary's Net
Income.
Difficulty: Medium
On January 1, 2009, Musial Corp. sold equipment to Matin Inc. (a wholly-owned subsidiary) for $168,000 in
cash. The equipment had originally cost $140,000 but had a book value of only $98,000 when transferred. On
that date, the equipment had a five-year remaining life. Depreciation expense was calculated using the
straight-line method.
Musial earned $308,000 in net income in 2009 (not including any investment income) while Matin reported
$126,000. Assume there is no amortization related to the original investment.
Hoyle - Chapter 05
118. What is consolidated net income for 2009?
Difficulty: Medium
119. Assuming that Musial owned only 90% of Matin, what is consolidated net income for 2009?
Difficulty: Medium
120. Assuming that Musial owned only 90% of Matin and the equipment transfer had been upstream, what is
consolidated net income for 2009?
Difficulty: Medium
ch5 Summary
Category
# of Questions
Difficulty: Easy
25
Difficulty: Hard
16
Difficulty: Medium
79
Hoyle - Chapter 05
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ch5

17. What are consolidated sales and cost of goods sold?

20. What is the total of consolidated revenues?

21. What is the total of consolidated operating expenses?

22. What is the total of consolidated cost of goods sold?

55. Compute consolidated sales.

56. Compute consolidated cost of goods sold.

66. Compute Collins' share of Smeder's net income for 2009.

67. Compute Collins' share of Smeder's net income for 2010.

70. Compute the gain or loss on the intercompany sale of land.

73. Compute income from Stiller on Leo's books for 2009.

74. Compute income from Stiller on Leo's books for 2010.

75. Compute the gain or loss on the intercompany sale of land.

85. What is the consolidated gain or loss on equipment for 2009?

97. How is the gain on an intercompany transfer of a depreciable asset realized?

103. How is the gain on an intercompany transfer of land realized?

118. What is consolidated net income for 2009?

17. What are consolidated sales and cost of goods sold?

20. What is the total of consolidated revenues?

21. What is the total of consolidated operating expenses?

22. What is the total of consolidated cost of goods sold?

55. Compute consolidated sales.

56. Compute consolidated cost of goods sold.

66. Compute Collins' share of Smeder's net income for 2009.

67. Compute Collins' share of Smeder's net income for 2010.

70. Compute the gain or loss on the intercompany sale of land.

73. Compute income from Stiller on Leo's books for 2009.

74. Compute income from Stiller on Leo's books for 2010.

75. Compute the gain or loss on the intercompany sale of land.

85. What is the consolidated gain or loss on equipment for 2009?

97. How is the gain on an intercompany transfer of a depreciable asset realized?

103. How is the gain on an intercompany transfer of land realized?

118. What is consolidated net income for 2009?

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