Prepare the worksheet consolidation entry or entries needed

Reference no: EM131893118

Problem

Karlow Corporation owns 60 percent of Draw Company's voting shares. During 20X3, Karlow produced 29,000 computer desks at a cost of $98 each and sold 14,000 of them to Draw for $110 each. Draw sold 9,000 of the desks to unaffiliated companies for $136 each prior to December 31, 20X3, and sold the remainder in early 20X4 for $146 each. Both companies use perpetual inventory systems.

a. Prepare the worksheet consolidation entry or entries needed in preparing consolidated financial statements at December 31, 20X3, relating to the intercorporate sale of inventory. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

b. Prepare the worksheet consolidation entry or entries needed in preparing consolidated financial statements at December 31, 20X4, relating to the intercorporate sale of inventory. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

c. Prepare the worksheet consolidation entry or entries needed in preparing consolidated financial statements at December 31, 20X4, relating to the intercorporate sale of inventory if the sales were upstream. Assume that Draw produced the computer desks at a cost of $98 each and sold 14,000 desks to Karlow for $110 each in 20X3, with Karlow selling 9,000 desks to unaffiliated companies in 20X3 and the remaining 5,000 in 20X4. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

Reference no: EM131893118

Questions Cloud

Compute cash collections from customers for each month : Kaspar Industries expects credit sales for January, February, and March to be $208,000, $264,600. Compute cash collections from customers for each month.

What is the entry when the prepayment is received : JVS had car sales for 2 mill. estimated warranty costs. What is the entry when the prepayment is received? What is the journal entry on December 31?

What is kantner overall change in net deferred tax liability : Kantner, Inc., is a domestic corporation with the following balance sheet for book. sWhat is Kantner overall change in net deferred tax liability?

Identify the accounting concepts involved : Identify the accounting concepts involved. Explain how karen should account for the potential liabilty and how this will affect her finnal accounts.

Prepare the worksheet consolidation entry or entries needed : Prepare the worksheet consolidation entry or entries needed in preparing consolidated financial statements at December 31, 20X3.

What is minimum acceptable total revenue from order : What were total production costs? What is the marginal cost per pair? What is the average cost per pair? What is minimum acceptable total revenue from order?

Identify the objective of financial reporting : Identify the objective of financial reporting. Describe level of sophistication expected of users of financial information by objective of financial reporting.

Which alternative would you recommend : Three Bags Full is a small grocery store chain in the Lehigh Valley. The company is trying to decide whether to include a bakery section in its stores.

What terms and conditions are essential in the contracts : What terms and conditions are essential in the contracts and/or purchase agreements you will have for each product? Assume necessary details.

User Account

All Pages