I have already given the journal entries for Planet and Saturn and the worksheet consolidation entries to prepare the consolidated financial statements.

Did you read how I described the dollar amounts of $750,000 and the $540,000 and the $210,000, which are dollar amounts located along the Sales row? The description is located above the box called Calculations.

How do I describe $600,000, $432,000, and $168,000, the dollar amounts, located along the Cost of goods sold in a couple of sentences?

How do I describe $150,000, $108,000, and $42,000 in a couple of sentences?

I have already given the journal entries for Planet and Saturn and the worksheet consolidation entries to prepare the consolidated financial statements.

Did you read how I described the dollar amounts of $750,000 and the $540,000 and the $210,000, which are dollar amounts located along the Sales row? The description is located above the box called Calculations.

How do I describe $600,000, $432,000, and $168,000, the dollar amounts, located along the Cost of goods sold in a couple of sentences?

How do I describe $150,000, $108,000, and $42,000 in a couple of sentences?

Week Three Practice Problem 4-andSolution Sale-of-Inventory to Subsidiary-L0-6-39 Planet-Corporation-acquired-90 percent of Saturn Company's voting shares of stock-in-20X1. During-20X4, Planet purchased-40,000-Playday doghouses for $24-each-and-sold-25,000 of them to-Saturn for $30 each. Saturn-sold-18,000 of the doghouses to retail-establishments prior to December 31, 20X4. for $45 each. Both-companies use perpetual-inventory systems. I Required a.+ Give all journal entries Planet recorded for the purchase of inventory and resale to-Saturn- Company in-20X4.1 b.+Give the journal entries-Saturn recorded for the purchase of inventory and resale to retail- establishments in 20X4. C.+ Give the worksheet-consolidation-entry(ies) needed-in preparing consolidated financial statements-for-20X4 to remove the effects of the intercompany sale. Sale of Inventory to Subsidiary (SOLUTION) 1 ad Journal entries recorded by Nordway Corporation: . (1) Inventory ...Cash (Accounts Payable) 960,0000 da 960.000da C a gggg (2) Cash (Accounts Receivable) Sales 750,0000 750,000 CA 600,0000 (3) Cost of Goods Soldo ---Inventory o 00 00 00 00 000 600,000 CA CA b. Journal entries recorded by Olman Company: gero arrara og a 750,0000 (1) Inventory -Cash (Accounts Payable) 750,00000 CA 810,0000 OOOOO (2) Cash (Accounts Receivable) Sales 0 810,0000 CA 540,0000 (3) Cost of Goods Soldo ---Inventory 540,0000 30 00 . QQ co Consolidation-entry: Sales 750,0000 CR -Cost-of-Goods Soldo 708,0000 Inventorya 42.000CM The basic-entry (not shown) would be adjusted-by-42,000 of deferred profit to complete the elimination process. I Sales COGS Gross-Profita Gross Profit-% Calculationsa Re- Ending Total =D Soldo +0 Inventoryo 750,000 540,000 o 210,000 600.000 432,000+ 0 168,000 150,000 o 108.0003 -42.000 20% od a.+ Give all journal-entries-Planet recorded for the purchase of inventory and resale to Saturn Company-in-20X4.5 1 a. Journal entries recorded by Nordway Corporation:0 During 20X4. Planet purchased-40,000 Playday doghouses for $24-each 1 =-40,000-doghouses-x-$24.00 sales price per unit 1 = $960,0001 C ! 960,0000 (1) Inventory ---Cash (Accounts Payable) di 960,0000) During 20X4, Planet purchased 40,000 Playday doghouses for $24-each-and-sold-25,000 of them to Saturn for $30 each. 1 =-25,000 doghouses-x-$30.00-sales price per unit = $750,0001 750,0000 (2) Cash (Accounts Receivable) ...Sales do 750,000da During 20X4, Planet purchased-40.000-Playday doghouses for $24-each-and-sold-25,000 of them to-Saturn for $30 each. =-25,000-doghouses-X-$24.00-sales price per unit =-S600.000 1 (3) Cost of Goods Soldo -----Inventory 600,0000 600.000 b. Give the journal entries-Saturn recorded for the purchase of inventory and resale to retail- establishments-in-20X4. 1 bo Journal entries recorded by Olman Company: During 20X4, Planet purchased-40,000-Playday doghouses for $24-each-and-sold-25,000 of them to-Saturn for $30 each. 1 =-25,000-doghouses-x-$30.00-sales price per unit = $750,000 750,0000 (1) Inventory ---Cash (Accounts Payable) da 750.000da Saturn-sold-18.000 of the doghouses to retail establishments prior to December 31, 20X4, for $45. each. 1 =-18.000-doghouses-X-$45.00-sales price per unit =-$810,0000 $150,000 $750,000 =-0.21 =-0.2-x-1009 =-20% *Gross Profit-ratio is-20% Planet-Corporation-acquired-90 percent of Saturn-Company's voting shares of stock-in-20X1. During 20X4, Planet purchased-40,000 Playday doghouses-for-$24-each-and-sold-25,000 of them to-Saturn for $30 each. Saturn-sold-18,000 of the doghouses to retail-establishments prior to December 31, 20X4. for $45 each. Both companies use perpetual-inventory systems. =-18,000 doghouses-*-$24.00-sales price per unit =-$432,0001 Cost-of goods sold (E+). ---- Inventory (AP) -$432,0000 -$432,0009 = $750,000-$540,000 =-$210,0009 =-$600,000-$432,000 1 =-$168.0001 1 Gross Profit-Formula 1 =-Net-sales revenue--Cost of goods sold =-Gross Profit =-$750,000-$600,000 = $150,0000 Gross-Profit-Formula =-Net-sales revenue--Cost-of goods-sold 1 =-Gross-Profit =-$540,000---$432,0001 = $108,0001 =-$210,000-$168,0001 1 =-$42.0001 $42,000 is the unrealized gain-and-deferred profit. I = $750,000-$42.000 =-5708,0001 V$708,000 is the Cost of goods sold. I co Consolidation entry: x QQ a 0 Sales 750,0000 Cost-of Goods Soldo 708,000C -----Inventoryo 42,000C The basic-entry (not shown) would be adjusted-by-42,000-of-deferred profit to complete the-elimination process. I Planet-Company, the Parent (Holding) company, purchases inventory of doghouses-in-20X1- for $708,000-and-sells the inventory during-20X4 to-Saturn, the subsidiary company, for $750,000. Thereafter, Saturn-sold and/or resold the inventory of doghouses to nonaffiliated Corporation for $540,000-during-20X4-but retains the other $210,000.5 1 a Saleso COGSO Gross Profita Gross-Profit-% Calculationso Re- Ending 1 Total =D Soldo + Inventory 750,000+ 540,000% 0 210.000 31 600.000% 0 432,000% 168,000:1 150,000-3 o 108,000 d 42,000 20% do 1