P6-22 Eliminations for Upstream Sales LO 6-4

Plug Products owns 80 percent of the stock of Spark Filter Company, which it acquired at underlying book value on August 30, 20X6. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Spark Filter. Summarized trial balance data for the two companies as of December 31, 20X8, are as follows:

		Plug Products								Spark Filter Company
	Debit				Credit				Debit					Credit
Cash and Accounts Receivable		$	149,000							$	99,000
Inventory			239,000								121,000
Buildings & Equipment (net)			281,000								197,000
Investment in Spark Filter Company			278,279
Cost of Goods Sold			166,000								131,000
Depreciation Expense			45,000								35,000
Current Liabilities						$	192,758							$	56,358
Common Stock							192,000								89,000
Retained Earnings							457,000								219,000
Sales							268,642								218,642
Income from Spark Filter Company							47,879
Total		$	1,158,279			$	1,158,279			$	583,000			$	583,000

On January 1, 20X8, Plug's inventory contained filters purchased for $73,000 from Spark Filter, which had produced the filters for $53,000. In 20X8, Spark Filter spent $113,000 to produce additional filters, which it sold to Plug for $155,642. By December 31, 20X8, Plug had sold all filters that had been on hand January 1, 20X8, but continued to hold in inventory $46,692 of the 20X8 purchase from Spark Filter. Required: a. Prepare all consolidation entries needed to complete a consolidation worksheet for 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

view transaction list transaction list No Entry Accounts Debit Credit Common stock Retained earnings Income trom Spark Flter Company NCI in NI of Spark Filter Investment in Spark Filter Company NCI in NA of Spark Filter B | | Investment in Spark Fiter Company NCI in NA of Spark Filter 2 Cost of goods sold 3 Sales Cost of goods sold Inventory view transaction list transaction list No Entry Accounts Debit Credit Common stock Retained earnings Income trom Spark Flter Company NCI in NI of Spark Filter Investment in Spark Filter Company NCI in NA of Spark Filter B | | Investment in Spark Fiter Company NCI in NA of Spark Filter 2 Cost of goods sold 3 Sales Cost of goods sold Inventory