INTRACOMPANY SALE OF INVENTORY

Given the following balances at December 31, 2023:

POLAR INCICECAP INCSALES$ 896,000$ 504,000COST OF GOODS SOLD 406,000 276,000OPERATING EXPENSES 210,000 147,000RETAINED EARNINGS, 1/1/181,036,000 252,000INVENTORY 484,000 154,000BUILDINGS (NET) 501,000 220,000INVESTMENT INCOME NOT GIVEN

Assume that Polar sold inventory to Icecap at a 20% gross profit percentage. Intra-entity transfers were $130,000 in 2022 and $165,000 in 2023. Of this inventory, $39,000 of the 2020 transfers were retained and then sold by Icecap in 2023, while $55,000 of the 2023 transfers was held until 2024.

Calculate the unrealized gross profit for 2022_____________ and 2023_____________

Required:

For the consolidated financial statements for 2023, determine the balances that would appear for the following accounts: (i) Cost of Goods Sold; and (ii) Inventory

CONSOLIDATED - COST OF GOODS SOLD CALCULATION FOR 2023

CONSOLIDATED - INVENTORY CALCULATION FOR 2023