Question
Karlow Corporation owns 70 percent of Draw Companys voting shares. During 20X3, Karlow produced 29,000 computer desks at a cost of $98 each and sold
Karlow Corporation owns 70 percent of Draw Companys voting shares. During 20X3, Karlow produced 29,000 computer desks at a cost of $98 each and sold 14,000 of them to Draw for $110 each. Draw sold 9,000 of the desks to unaffiliated companies for $136 each prior to December 31, 20X3, and sold the remainder in early 20X4 for $146 each. Both companies use perpetual inventory systems. |
Required: |
a. | What amounts of cost of goods sold did Karlow and Draw record in 20X3? |
b. | What amount of cost of goods sold must be reported in the consolidated income statement for 20X3? (Do not round intermediate calculations.) |
karlow corportation cost of goods sold? draw company cost of goods sold? |
c. | Prepare the worksheet consolidation entry or entries needed in preparing consolidated financial statements at December 31, 20X3, relating to the intercorporate sale of inventory. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) |
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