Problem #3 (20 points)

Lee Corp. owns 80% of Flores Co. Lee uses the equity method to account for its investments. During 2023, Lee Corp. sells inventory to Flores for $375,000. The inventory originally cost Lee $290,000. At December 31, 2023, 40% of the goods were still in Flores' inventory.

Required:

Prepare the Consolidation Entry TI and Consolidation Entry G for the consolidation worksheet.