PROBLEMS Problem 6-1 LO2 Selected accounts from the year-to-date financial statements for Garcia Company and its wholly owned subsidiary, Cornwall Ltd., were as follows:

Cash Inventory Deferred income tax asset Sales Cost of sales Income tax expense Garcia $ 160 640 100 8,000 4,800 800 Cornwall $ 690 350 70 5,600 4,000 540 Consolidated $ 850 Required Determine the account balance for each account on the three financial statements after the new transaction is recorded. 990 170 13,600 8,800 1,340 Page 345 New Transaction . Garcia had a cash sale of $500 to Cornwall at its regular gross margin of 40% of sales and accrued income tax at its tax rate of 30%. This was the only intercompany transaction this year.

Selected accounts from the yearto date financial statements for Garcia Company and its wholly owned subsidiary, Cornwall Ltd, were as follows: New Transaction - Garcia had a cash sale of $500 to Cornwall at its regular gross margin of 40% of sales and accrued income tax at its tax rate of 30%. This was the only intercompany transaction this year. Required Determine the account balance for each account on the thee financial statements after the new transaction is recorded