Question

Mr. & Mrs. Dart own a majority of the outstanding capital stock of Wall Corp., Black Co., and West, Inc. During 2010, Wall advanced cash to Black and West in the amount of $50,000 and $80,000, respectively. West advanced $70,000 in cash to Black. At December 31, 2010, none of the advances was repaid. In the combined December 31, 2010, balance sheet of these companies, what amount would be reported as receivables from affiliates?

Answer 1

Answer:

The amount that would be reported as receivables from affiliates is $0.

Explanation:

Here Mr and Mrs Dart owns a majority of shares of Wall corp, Black co, and West inc. In 2010 , wall made advanced cash to black($50,000) and west($80,000) and also west made advance to black($70,000).

While preparing the combined balance sheet for all these company's , any amount of account receivables will not be included because preparing a combined balance sheet is same as making consolidated balance sheet , were any inter company profit or losses , account receivables and payable are not included in the balance sheet , so therefore the amount that would be reported as receivables from affiliates is $0.