Reference no: EM133049837

Questions -

Q1. Par Inc owns 75.25% of Sub Corp. On January 1, Year 3, Sub purchased $128,851 face value of Par's 9.99% bonds for $107,011. On that date, Par's total bond liability consisted of $257,702 face-value bonds with an unamortized bond discount of $21,489. Interest payments are June 30 and December 31 each year. Straight-line method is used for bond amortization. Both companies have a Dec 31 year end. What amount would be shown on Par's Consolidated Statement of Financial Position under Bonds Payable on Dec 31, Year 3?

a. $116,201

b. $110,242

c. $107,263

d. $119,181

e. $113,222

Q2. Par Inc owns 78.55% of Sub Corp. During the year, Par sold inventory to Sub for $91,214. Exactly 48.91% of this inventory remained in Y's warehouse at year end. Sub sold inventory to Par for $45,609 of which 40.55% remained in X's warehouse at year end. Both companies are subject to a tax rate of 29.07%. The gross profit percentage on sales is 20% for both companies. What is the after-tax dollar value of Sub's unrealized profits during the year on its sales to Par?

a. $2,558

b. $2,427

c. $2,492

d. $2,689

e. $2,624