Solution-Determine how this transaction should have been

Determine how this transaction should have been accounted

Reference no: EM133047963

Question - The X Company's 2015 financial statements disclosed the following transaction with Y Company that was formed by X-

"In June 2015, Y purchased machinery from X for $100 million. Y paid X $30 million in cash and the balance in an interest bearing note for $70 million. X recognized $67million pre-tax earnings related to this asset sale"

Required - Determine how this transaction should have been accounted for assuming:-

i. X controlled Y and used consolidated financial statements to report the investment in Y.

ii. X had significant influence and used the equity method to report the investment in Y.

ii. X did not have control or significant influence over Y.

Reference no: EM133047963

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Determine how this transaction should have been accounted

Reference no: EM133047963

Reference no: EM133047963

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