Calculations and Analysis Should Be Based on Current Canadian GAAP

question 34

Essay

Calculations and analysis should be based on current Canadian GAAP.
On January 1,2006,Alpha,Beta and Gamma agree to enter into a joint venture and thereby formed Find Corp.Alpha contributed 40% of the assets to the venture,which was also its stake in the venture.Presented below are the financial statements of Alpha and Find as at December 31,2010: Alpha's Investment has been accounted for using the partial equity method.No intercompany eliminations have been recorded.
Alpha supplies Find with an important component that is used by Find as it carries out its business activities.The December 31,2010 inventory of Find contains items purchase from Alpha on which Alpha recorded a gross profit of $10,000.Intercompany sales are always priced to provide the seller with a gross margin of 40% on sales.Both companies are subject to a tax rate of 40%.On December 31,2010,Find still owed $5,000 to Alpha for unpaid invoices.
-Prepare a schedule of intercompany items as at December 31,2010.

---

Definitions:

Checkroom

A place where visitors can deposit their personal belongings, such as coats and bags, for safekeeping.

Bailment

The act of placing property into the temporary custody or care of another, typically under an agreement for a specific purpose.

Damages

Monetary compensation ordered by a court for harm or injury suffered by an individual.

Ordinary Care

The level of caution and attention to duty that a reasonable person would employ in similar circumstances, often relevant in negligence cases.