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Upstream and Dcwnstream Sales Face Company cmns 35% of the ouztandlng common stock of Sand Company and all the outstanding common stock of Star
Upstream and Dcwnstream Sales Face Company cmns 35% of the ouztandlng common stock of Sand Company and all the outstanding common stock of Star Company During 2012, the affiliates engaged in intercompany sales as follows Sales of Merchandise Face to sand S 40000 sand to Pace 60000 sand to star 75,000 star to Pace 50,000 225,000 The following amounts of intercompany profits were included in the December 31, 2011, and December 31, 2012, inventories of the individual companies: Intercompany Profit In December 31, 2011, Inventory ot Selling Company Pace Sand Star Total Face company S 7, OOO sand company S S3,oco 8,000 star company 8,000 8,000 Total $13,000 $7 , oco S3,oco Szooo Intercompany Profit in December 31, 2012, Inventory of Selling Company Pace Sand Star Total Pace company S 2,OCO sand company S 6,000 *OCO 15,000 star company 4,000 4,000 Total $10,000 S2,oao Sg,oao 521,000 Income from each companVs independent operations Onclu&ng sales to affiliates) for the year ended December 31, 2012, is presented hare: Pace company $200,000 Sand Company ISO,COO star company 125,000 Required: A. Prepare in general journal form the workpaper entries necessary' to eliminate intercompany sales and intercompany profit in the December 31, 2012, consolidated financial statements workpaper 2011 Sales Purchases (Cost of Goods Sold) 12'31 Inventory (Income Statement) Inventory (Balance Sheet) $436,000.00 54362000.00 $18,157.00 518,166.57
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