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Rowe Inc. owns80% of Cowan Co.'s outstanding capital stock. On November1, Rowe advanced $100,000 in cash to Cowan. What amount should be reported related to the advance in Rowe's consolidated balance sheet as of December31? a. $0 b. $20,000 c. $80,000 d. $100,000
Zero-in consolidated balance sheet inter co owings are eliminated
D 100000
$100,000 it is recorded as debt on Cowan.
D) $100,000 and will also be dislosed in FS as Investment in associate.
D) will be recorded as advance to cown with full amount $100K and will also be disclosed in FS as related party transaction.
In the individual financial statement of Rowe, $ 100,000 but zero in the consolidated finacial statements because upon consolidation, all intragroup balances, transactions, income and expenses are elimiated in full.
20000
Zero amount of advance to inter company will go in the BS as it will be eliminated at the time of consolidation.
I agree with the answer given by Prince Ninan Chartered Accountant.
100,000 - related party transaction
