For Questions 10-11 please use the following data: Company C owns a 25% interest

Question

For Questions 10-11 please use the following data: Company C owns a 25% interest in a joint venture, JVC, and accounts for it using the equity method. They have each reported the following 2006 financial results. During 2006, Company C purchased 35% of the output of JVC. Additionally, JVC has an account receivable from Company C of SI 50 at the end of2006. Using proportionate consolidation, the accounts receivable of Company C reported on the balance sheet are: Using proportionate consolidation, the Company C's cost of goods on its 2006 income statement is:

Explanation / Answer

Answer (10)

Amount

Account recievable 3500

(-) Proportionate Accounts payable to JVC 90

Net Accounts receivable 3410

Answer 11.

Amount

Cost of Goods Sold 7000

(+) Proportionalte Cost of Goods Sold (JVC) 1200

Total Cost of Goods Sold 8200

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