The following data applies to Questions 5-8: Hunter Company and Moss Company both produce and purchase fabric for resale each period and frequently sell to each other. Since Hunter Company holds 80% ownership of Moss Company, Hunter's controller compiled the following information with regard to intercompany transactions between the two companies in 20X7 and 20X8. Must show computations wherever applicable; otherwise, no credit will be given.

Year of Percent Resold to Non-Affiliate in Cost to Transfer Price Transfer Produced by Sold to 20X7 20X8 Produce to Affiliate 20X7 Hunter Co. Moss Co. 70% 30% $170,000 $200,000 20X7 Moss Co. Hunter Co. 50% 50% 50,000 80,000 20X8 Hunter Co. Moss Co. 75% 35,000 52,000 20x8 Moss Co. Hunter Co. 40% 230,000 280,000

Required: Give the consolidation elimination entries required at 12/31/20X8 to eliminate the effects of the inventory transfers in preparing a full set of consolidated financial statements.

5. Reversal of gross profit deferral on the 20x7 Downstream transfer: (15%) Dr. COMPUTATION: Cr.

6. Reversal of gross profit deferral on the 20x7 Upstream transfer: (15%) Dr. COMPUTATION: Cr.

7. Eliminate effects of the 20X8 Downstream transfer: (15%) Dr. COMPUTATION: Cr.

8.Eliminate effect of the 20X8 Upstream transfer: (15%) Dr. COMPUTATION: Cr.

The following data applies to Questions 5-8: Hunter Company and Moss Company both produce and purchase fabric for resale each period and frequently sell to each other. Since Hunter Company holds 80% ownership of Moss Company, Hunter's controller compiled the following information with regard to intercompany transactions between the two companies in 20X7 and 20X8. Must show computations wherever applicable; otherwise, no credit will be given. Required: Give the consolidation elimination entries required at 12/31/20X8 to eliminate the effects of the inventory transfers in preparing a full set of consolidated financial statements. 5. Reversal of gross profit deferral on the 207 Downstream transfer: (15\%) Dr. COMPUTATION: Cr. 6. Reversal of gross profit deferral on the 207 Upstream transfer: (15\%) Dr. COMPUTATION