Question
Push Company owns 60% of Shove Companys outstanding common stock. Intra-entity sales are as follows: Year Inventory Cost Transfer Price Inventory Remaining at Year End
Push Company owns 60% of Shove Companys outstanding common stock. Intra-entity sales are as follows:
| Year | Inventory Cost | Transfer Price | Inventory Remaining at Year End (at transfer price) | ||||||
| 20X1 | $ | 80,000 | $ | 100,000 | $ | 30,000 | |||
| 20X2 | $ | 110,000 | $ | 130,000 | $ | 26,000 | |||
Assume Shove sold the inventory to Push. Using the fully adjusted equity method, what journal entry would be recorded by Push to recognize the realization of the 20X1 deferred intercompany profit and to defer the 20X2 unrealized gross profit on inventory sales to Shove?
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
