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Can you help me fixing my solution? Problem 2 Portion Company holds 75% of Some Company stock. Portion has sold inventory to Some Company as
Can you help me fixing my solution?
Problem 2 Portion Company holds 75% of Some Company stock. Portion has sold inventory to Some Company as follows: Year 2017 2018 2019 2020 Sales Cost to Price to Portion Some $203,000 $355,000 $208,000 $312,000 $120,000 $150,000 $150,000 $250,000 Percent of Sold Inventory Held at Year end 20% 45% 30% 40% The following balances were included in the individual financial statements of each company for the year ended 12/31/2020: Sales Cost of goods sold Merch. inventory Portion Somo $ 7,500,000 3,700,000 $ 3,470,000 2,300,000 $ 590,000 360,000 a. What will be reported as consolidated sales in the year 2020? b. What will be reported as consolidated inventory at 12/31/2020? c. What will be reported as consolidated cost of goods sold for 2020? d. Were the intra-entity sales of inventory items upstream or downstream? 1 N 2 = + + 3 a. Consolidated sales = $7,500,000 + $3,700,000 - $250,000 = $10,950,000 4 5 b. Consolidated inventory = $590,000 + $360,000 - $60,000 = $890,000 6 7 $100,000 X 60%= $60,000 8 9 c. Cost of goods sold = $3,470,000 + $2,300,000 - $250,000+ $60,000 - $21,000 = $5,559,000 10 11 *$30,000 X 70% = $21,000 12 13 d. Downstream 14 15 16 17 18 19 20 21 22 Problem 2 Item possible actual points points notes 2 2 NN 2 2 a. Sales sales TI b. MI MI gain in EI 3 3 2 The unrealized margin in the ending inventory is not right, but without any calculations I cannot suggest a correction. C. CGS CGS gain in B1 2 2 2 The unrealized margin in the beginning inventory is not correct. -TI 1 2 1 1 The unrealized margin the ending inventory is not correct. +gain in EI d. transfers direction 4 4 20 15 Problem scoreStep by Step Solution
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