Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

P Company acquired 75 percent of S Company on January 1, 2003 at book value. During 2003, S purchased inventory for $35,000 and sold it

P Company acquired 75 percent of S Company on January 1, 2003 at book value. During 2003, S purchased inventory for $35,000 and sold it to P for $50,000. Of this amount, P reported $20,000 in ending inventory in 2003 and later sold it in 2004. In 2004, P sold inventory it had purchased for $40,000 to S for $60,000. S sold $45,000 of this inventory in 2004. In 2004, P reported stand-alone income of $760,000 and S reported total net income of $105,000.

a) Prepare the consolidation entries that related to inter-company sale of inventory at December 31, 2003

b) Prepare the consolidation entries that related to inter-company sale of inventory at December 31, 2004

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Surviving The OSHA Audit Common Sense Solutions To Your Most Feared OSHA Compliance Issues

Authors: David A. Casavant

1st Edition

0998743704, 978-0998743707

More Books

Students also viewed these Accounting questions

Question

Explain the forces that influence how people handle conflict

Answered: 1 week ago