Question

Consolidation procedures for intra-entity land transfers partially parallel those for the events occurring in an intra-entity inventory transfer. The worksheet process must adjust the account balances as a single economic entity.

The sequence of events in an intra-entity land sale_________

Answer 1

The sequence of events in an intra-entity land sale involves recording the sale transaction, recognizing gain or loss, and eliminating intercompany profit during consolidation.

Step-by-step explanation:

The sequence of events in an intra-entity land sale involves several steps. First, the company records the sale transaction by debiting the account for cash received and crediting the account for land sold. Next, any difference between the book value and fair value of the land is recognized as a gain or loss on the sale. The company then eliminates the intercompany profit on the land sale during the consolidation process.

The sequence of events in an intra-entity land sale in consolidation procedures is as follows:

Determine the carrying amount of the land being transferred.

Record any gain or loss on the transfer, if applicable.

Adjust the account balances to reflect the transfer as a single economic entity.