18 Intercompany Profit Transactions --Inventories P55 Upstream and downs Justin Bhd is a 90 percent of Justin Bhd's net identif um and downstream sales, 90 percent owned ent-owned company of Epik Bhd and was acquired in 2011, when the book valu entifiable assets were equal to lair value. Information regarding inventory transactions Justin Bhd and Epik Bhd is as follows: hd sold inventories of $5,000,000 to Epik Bhd with 20 percent gross profit on it. At the end of a year $200,000 inventories from Justin Bhd remained in Epik Bhd hd sold Inventories of $8,000,000 to Justin Bhd. The gross profit on the sale was 10%. At the the year $100,000 inventories from Epik Bhd were not sold to outside parties balances for both companies for the year ended December 31, 2014 are as follows 2013, Justin Bhd sold h 2014, Epik Bhd soldie fin thousands) Justin Bhd Epik Bhd $ 1.200 2.000 21000 $ 800 300 Debits Cash Accounts receivable Dividends receivable Inventory Land Equipment Investment in Justin Bhd Cost of sales Other expenses Dividends Total 2.300 1.300 500 0 1.000 2,500 1.200 3.474 6,200 200 200 $ 18,064 3.900 400 100 $9.600 $ 900 S 600 100 Credits Accounts payable Dividends payable Common stock Retained Earnings Sales Total 6,000 2.764 8.400 $ 18,064 2,500 1,300 5.100 $9.600 No dividends were paid by Justin Bhd during the year. REQUIRED: Prepare consolid December 31, 2014 Prepare consolidation work papers for Epik Bhd and Subsidiary for the year ended P5-7 18 Intercompany Profit Transactions --Inventories P55 Upstream and downs Justin Bhd is a 90 percent of Justin Bhd's net identif um and downstream sales, 90 percent owned ent-owned company of Epik Bhd and was acquired in 2011, when the book valu entifiable assets were equal to lair value. Information regarding inventory transactions Justin Bhd and Epik Bhd is as follows: hd sold inventories of $5,000,000 to Epik Bhd with 20 percent gross profit on it. At the end of a year $200,000 inventories from Justin Bhd remained in Epik Bhd hd sold Inventories of $8,000,000 to Justin Bhd. The gross profit on the sale was 10%. At the the year $100,000 inventories from Epik Bhd were not sold to outside parties balances for both companies for the year ended December 31, 2014 are as follows 2013, Justin Bhd sold h 2014, Epik Bhd soldie fin thousands) Justin Bhd Epik Bhd $ 1.200 2.000 21000 $ 800 300 Debits Cash Accounts receivable Dividends receivable Inventory Land Equipment Investment in Justin Bhd Cost of sales Other expenses Dividends Total 2.300 1.300 500 0 1.000 2,500 1.200 3.474 6,200 200 200 $ 18,064 3.900 400 100 $9.600 $ 900 S 600 100 Credits Accounts payable Dividends payable Common stock Retained Earnings Sales Total 6,000 2.764 8.400 $ 18,064 2,500 1,300 5.100 $9.600 No dividends were paid by Justin Bhd during the year. REQUIRED: Prepare consolid December 31, 2014 Prepare consolidation work papers for Epik Bhd and Subsidiary for the year ended P5-7
