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Problem 1: Partial sale of investment interest and deferral of intra-entity gross profit on inventory problem: On January 1, 2023, Flint Corporation purchased 40% of

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Problem 1: Partial sale of investment interest and deferral of intra-entity gross profit on inventory problem: On January 1, 2023, Flint Corporation purchased 40% of the outstanding voting common stock of Clyde Company for $560,000. On January 1,2023 , Clyde had 500,000 shares issued and outstanding. This purchase gave Nelson the ability to exercise significant influence over the operating and financial policies of Clyde. On the date of purchase, Clyde's books reported assets of $1,800,000 and liabilities of $600,000. Any excess of cost over book value of Nelson's investment was attributed to a patent with a remaining useful life of seven years. During 2023, Clyde reported net income of $250,000 and declared and paid cash dividends of $55,000. In the following year, 2024, Clyde reported net income of $300,000 and declared and paid a dividend on August 30, 2024 in the amount of $70,000. In 2023 , Flint sold inventory costing $60,000 to Clyde for $80,000. Clyde sold 75% of that inventory to outsiders during 2023 with the remainder being sold on February 5, 2024. On March 30, 2024, Flint sold inventory costing \$70,000 to Clyde for $100,000. Clyde sold 40% of that inventory to outsiders during the period between April 1, 2024 and June 30,2024. Additionally, Clyde sold 20% of that inventory between July 1, 2024 and December 31, 2024. On July 1, 2024, Flint sold 20,000 shares of Clyde Company stock for $80,000. Clyde still had 500,000 shares issued and outstanding on July 1, 2024 and December 31, 2024. On its June 30, 2024, Income Statement Clyde Company reported $180,000 in net income. Clyde Company did not declare any dividends between January 1, 2024 and June 30, 2024. On July 1, 2024 the patent had a net book value of $135,000 and a fair market value of $340,000. Prepare all journal entries for Flint Corporation related to its investment in Clyde from January 1, 2023 until December 31, 2024

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