P Company Bought 60% of the Common Stock of S

question 22

Essay

P Company bought 60% of the common stock of S Company on January 1, 2017. On January 1, 2017 there was an intercompany sale of equipment at a gain of $63,000. The equipment had an estimated remaining life of six years. Net incomes of the two companies from their own operations (including sales to affiliates) were as follows:
A. If S Company sold the equipment to P Company, fill in the following matrix: B. If P Company sold the equipment to S Company, fill in the following matrix:

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Definitions:

Cell Phones

Portable electronic devices used for mobile communication, including voice calls, text messaging, and internet access.

MP3 Players

Electronic devices designed to play digital audio files in MP3 format, allowing for portable music playback.

Circuit Boards

Are the electronic platforms that physically support and electrically connect the components of electronic devices.

Supply

The total amount of a product or service that is available to consumers at a given price level.