Sign In Sign Up Ask an AI advisor
joyelewis58
joyelewis58
22.07.2020 • 
Business

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?

Solved
Show answers

Ask an AI advisor a question

I want advice