Overview
- Stubben Corporation is a 90%-owned subsidiary of Parker Corporation, acquired for $290,000 on 1/1/2005.
- Investment cost was equal to book value and fair value.
- Stubben’s net income in 2005 was $80,000, and Parker’s income, excluding its income from Stubben, was $100,000.
- Parker’s income includes a $8,000 unrealized gain on land that cost $40,000 and was sold to Stubben for $48,000.
- Assume that Stubben sold the land in 2007 for $64,000. Assume Parker adjusts for this transaction in the equity accounts.
- Split up the adjustment for unrealized gains proportionately.
As per downstream transaction Required:
- What Entry(ies) would Parker make in 2005 and 2007?
- Prepare the consolidation entries at 12/31/2005, 12/31/2006, and 12/31/2007.
(5 Marks)
Solution:
- Relationship between Currencies and Exchange Rates:
Exchange Rates | January 1, 2024 | June 30, 2024 | December 31, 2024 |
Direct Exchange Rate | |||
Indirect Exchange Rate |
Required:
- Choose any two currencies of the two nations
- Determine the Direct and Indirect Exchange Rates on the above given dates in table.
- Explain clearly the Decrease or Increase in the DER and IER during the two period given in the table.
- Explain Relative Strengths and Weaknesses of these currencies during these periods.
- Discuss the impact of Changes in the Exchange Rates on the Import and Export of these nations.
(5 Marks)
Solution:
- Partnership form of business organisation has certain pros and cons. Explain any Two advantages and Two Disadvantage of Partnership form of business organisation.
(5 Marks)
Solution: