As a student of accounting it is important to understand

Reference no: EM13387294

As a student of accounting, it is important to understand what triggers the preparation of consolidated financial statements. The statements can be consolidated across divisions, across international locations, and across multiple currencies.

Deliverable Length: 600 words

Analyze the financial statements of the company that you have already selected in Part 1 for intercompany and intracompany transactions.

Why do you think it is important to make entries to eliminate intercompany transactions?

What is the difference between intercompany and intracompany transactions?

Deliverable Length: 400 words

You just got hired to work as an accountant in the consolidations department of a multinational firm. Your boss comes to you and wants to see how much knowledge you have on consolidations. He says, "I want you to prepare a report explaining the steps that go into preparing consolidated income statements and balance sheets."

Please prepare the report for your boss.

Deliverable Length: 600 words

ABC Company owns 100% of XYZ Company. During the year, ABC Company sold $30,000 (cost) worth of inventory to XYZ Corporation for $60,000. At the end of the year, XYZ Company has all of the inventory on the books.

Please record the following:

Record the entries on ABC books to record the sale and the cost of goods sold.

Record the entry on XYZ books to record the purchase of inventory from ABC.

Record the intercompany transaction.

Explain how failure to record this intercompany transaction will impact the consolidated financial statement.

Reference no: EM13387294

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