At December 31, 20X9, Grey Incorporated owned 90 percent of Winn Corporation, a consolidated subsidiary, and 20 percent of Carr Corporation, an investee in which Grey cannot exercise significant influence.

 At December 31, 20X9, Grey Incorporated owned 90 percent of Winn Corporation, a consolidated subsidiary, and 20 percent of Carr Corporation, an investee in which Grey cannot exercise significant influence. On the same date, Grey had receivables of $300,000 from Winn and $200,000 from Carr. In its December 31, 20X9, consolidated balance sheet, Grey should report accounts receivable from its affiliates of

Multiple Choice

$500,000.


$340,000.


$230,000.


$200,000. Correct

 
Explanation
4.

The only accounts receivable from affiliates that will be eliminated from the consolidated balance sheet are receivables from consolidated entities (Winn Corporation). Thus, the receivable from any unconsolidated investees (Carr Corporation) would be reported on the consolidated balance sheet. [AICPA Adapted]

($500,000) Incorrect. Receivables from consolidated entities (Winn Corporation) would be eliminated in consolidated, while any receivables from an unconsolidated investee would still be reported.
($340,000) Incorrect. Receivables from the consolidated entity (Winn Corporation) would be eliminated in their entirety, while receivables from investees under significant influence (Carr Corporation) would be reported in their entirety, not proportionately eliminated.
($230,000) Incorrect. The only amounts that should be recorded on the consolidated balance sheet are the receivables from the investee under significant influence (Carr Corporation), while receivable from the consolidated entity (Winn Corporation) would be eliminated in consolidation.