Exercise 1: Consolidation Elimination Entries
For each of the following scenarios, Assume the companies are related and subject to consolidation and make an appropriate elimination entry by entering the required amounts in the gray shaded cells. When correct, cells will change color. If a cell does not require an entry (aka 0) then type in the word "zero" and the cell will change color if that's correct.
A) Company P has a note receivable open from Company S in the amount of $50,000. $4,000 interest was incurred and accrued for at year-end
Account					Debit			Credit
Note Payable
Interest Income
Interest Payable
	Note Receivable
	Interest Expense
	Interest Receivable
B) Company P has a note receivable from Company S open at year-end in the amount of $30,000. $2,000 interest was incurred and paid for by year-end
Account					Debit			Credit
Note Payable
Interest Income
Interest Payable
	Note Receivable
	Interest Expense
	Interest Receivable
C) Company P hds a note receivable from Company S in the amount of $7,500 that was paid off by year-end. $250 interest was incurred and paid for by year-end
Account					Debit			Credit
Note Payable
Interest Income
Interest Payable
	Note Receivable
	Interest Expense
	Interest Receivable
D) Company S sold inventory to Company P for $100,000 with a gross margin of 70% on account. All the inventory remains on Company P's books at year-end and it has not been paid for
Account					Debit			Credit
Sales
Accounts Payable
	Accounts Receivable
	Cost of Good Sold
	Inventory
E) Company S sold inventory to Company P for $80,000 with a gross margin of 50% on account. All the inventory remains on Company P's books at year-end and it has not been paid for
Account					Debit			Credit
Sales
Accounts Payable
	Accounts Receivable
	Cost of Good Sold
	Inventory
F) Company P sold inventory to Company S for $50,000 with a gross margin of 40% on account. All the inventory was subsequently sold to 3rd parties, and it has been paid for:
Account					Debit			Credit
Sales
Accounts Payable
	Accounts Receivable
	Cost of Good Sold
	Inventory
G) Company P sold inventory to Company S for $30,000 with a gross margin of 25% on account. All the inventory was subsequently sold to 3rd parties, and it has been paid for:
Account					Debit			Credit
Sales
Accounts Payable
	Accounts Receivable
	Cost of Good Sold
	Inventory
H) Company P sold a fully-depreciated asset with an original cost of $75,000 to Company S for $20,000. Company S recognized $5,000 in depreciation expense on the asset and it has been paid for:
Account					Debit			Credit
Fixed Asset
Gain on Sale of Asset
Depreciation Expense
Accumulated Depreciation
I) Company P sold a half-depreciated asset with an original cost of $40,000 and annual depreciation of $4,000 to company S for $30,000. Company S recognized $3,000 in depreciation expense on the asset and it has been paid for.
Account					Debit			Credit
Fixed Asset
Gain on Sale of Asset
Depreciation Expense
Accumulated Depreciation