Problem 2

Pine Company holds 60% of Spruce Company stock.

Pine has sold inventory to Spruce Company as follows:

yearCost to PineSales price to spruce Percent of Sold Held at y year Pine Spruce Year

2017$193,000$347,00030%

2018$206,000$310,00020%

2019$360,000$450,00025%

2020$150,000$250,00030%

The following balances were included in the individual financial statements of each company for the year ended 12/31/2020:

Pine Co.Spruce

Sales $ 5,100,0003,900,000

Cost of goods sold $ 3,570,0002,400,000

Merchandise inventory $ 580,000390,000

b. What will be reported as consolidated inventory at 12/31/2020?

c.What will be reported as consolidated cost of goods sold for 2020?