INTRA-ENTITY INVENTORY TRANSFER

Pit Corporation owns 70% of Stop Companys outstanding common stock. On 08/28/20, Pit sold inventory to Stop in exchange for $560,000 cash.

Pit had purchased the inventory on 05/02/20 at a cost of $420,000.

On 12/20/20, Stop sold 90% of the inventory to 3rd parties at a cash price of $672,000. The other 10% of the inventory remains on hand at

12/31/20.

Requirement: Prepare the 12/31/20 consolidation worksheet entry related to these transactions. Use the templates provided below and please show the calculations.

ADJUSTMENT WE HAVE: Combined G/L Bals WE NEED: Consolidated Amounts Account P's G/L S's G/L WHICH LEADS TO....... WE HAVE: Combined G/L Bals Consolidation Entries debit credit WE NEED: Consolidated Amounts Account P's G/L S's G/L CALCULATIONS