Power Corporation owns 75 percent of Swift Company's stock. Swift provides health care services to its employees and those of Power. During 20X2, Power recorded 37,500 dollars as health care expense for medical care given to its employees by Swift. Swift's costs incurred in providing the services to Power were 32,000 dollars. A) By what amount will consolidated net income change when the intercompany services are eliminated in preparing Power's consolidated statements for 20X2?
B) What would be the impact of eliminating the intercompany services on consolidated net income if Power owned 100 percent of Swift's stock rather than 75 percent?
C) If in its consolidated income statement for 20X2 Power had reported total health care costs of 72,000 dollars, what was the cost to Swift of providing health care services to its own employees?

San ruiz interiors provides design services to residential and commercial clients. the residential services produce a contribution margin of $450,000 and have traceable fixed operating costs of $480,000. management is studying whether to drop the residential operation. if closed, the fixed operating costs will fall by $370,000 and san ruiz’ income will

Paar corporation bought 100 percent of kimmel, inc., on january 1, 2012. on that date, paar’s equipment (10-year life) has a book value of $420,000 but a fair value of $520,000. kimmel has equipment (10-year life) with a book value of $272,000 but a fair value of $400,000. paar uses the equity method to record its investment in kimmel. on december 31, 2014, paar has equipment with a book value of $294,000 but a fair value of $445,200. kimmel has equipment with a book value of $190,400 but a fair value of $357,000. the consolidated balance for the equipment account as of december 31, 2014 is $574,000. what would be the impact on consolidated balance for the equipment account as of december 31, 2014 if the parent had applied the initial value method rather than the equity method? the balance in the consolidated equipment account cannot be determined for the initial value method using the information given. the consolidated equipment account would have a higher reported balance. the consolidated equipment account would have a lower reported balance. no effect: the method the parent uses is for internal reporting purposes only and has no impact on consolidated totals.

For each example identify the most appropriate ctso