Strayten Corp

question 62

Essay

Strayten Corp. is a wholly owned subsidiary of Quint Inc. Quint decided to use the initial value method to account for this investment. During 2010, Strayten sold Quint goods which had cost $48,000. The selling price was $64,000. Quint still had one-eighth 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 2011.

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Definitions:

Agency Relationship

A legal and consensual arrangement where one party, the agent, acts on behalf of another, the principal, in dealings with third parties.

Intent

The purpose or mindset with which an individual acts, significant in both criminal and civil law to determine culpability or liability.

Principal

In agency law, a person who agrees to have another, called the agent, act on his or her behalf.

Agency Relationship

A legal and fiduciary relationship between two parties, where one (the agent) is authorized to act on behalf of the other (the principal) in business dealings.