1. On June 9, Pluto Co. sold inventory to its wholly owned subsidiary, Saturn Co. for $375,000. The cost of this inventory to Pluto was $300,000. Thus, Pluto sold the inventory to Saturn at a 25% mark-up above cost (i.e., $300,000 cost x 25 = $375,000 transfer price). Both companies maintain a perpetual inventory system.

What is the journal entry recorded by Pluto?

What are the journal entries recorded by Saturn?

On July 25, Saturn sells half of this inventory to its (third-party) customers for $280,000.

What are the journal entries recorded by Saturn? (Remember, Saturn is using a perpetual inventory system).

It is now December 31, and Saturn continues to own the remaining inventory (i.e., the other half of the $375,000 inventory it acquired from Pluto on June 9). On todays (12/31) consolidation worksheet, what is the appropriate worksheet entry?