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Company A buys 2,500 units of inventory for a total of $5,000 from an unrelated third-party company. Later, Company A sells these units to its
Company A buys 2,500 units of inventory for a total of $5,000 from an unrelated third-party company. Later, Company A sells these units to its subsidiary, Company B, for $10,000 in an intercompany inventory transaction.
Company B sells 1,000 of the 2,500 units to unrelated customers for $10,000 and holds the other 1,500 units in inventory until customers buy them in the future.
What is the correct elimination journal entry to account for the intercompany inventory transfer?
I have the answer. Need to understand how i got there. Thanks
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