Trinidad company report on its balance sheet

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On January 1, 2010, the Hadad Company entered into a consignment agreement with the Trinidad Company. The agreement specifies that the consignee (Trinidad) is to sell the merchandise at a price of 30% above cost. Trinidad is required to pay Hadad the net sales price within 15 days of each sale to a third party. The net sales price is defined as the sales price, less any advertising costs incurred by Trinidad, and less a commission of 10% deducted from the sales price less the advertising costs. Hadad pays any costs incurred in shipping the merchandise to Trinidad. In 2010 Hadad shipped merchandise costing $300,000 to Trinidad and incurred delivery costs of $8,000. During the year (through December 15), Trinidad made sales of $195,000 and incurred advertising costs of $15,000, and paid the required amount to Hadad. On December 31, 2010, Hadad phoned Trinidad and was told that since December 15 additional sales of $39,000 had been made and advertising costs of $3,000 incurred. (Record this information in separate journal entries.)

Required:
1. Prepare the journal entries for the Hadad Company.
2. What amount, and in what category, would Hadad Company report on its balance sheet on December 31, 2010?
3. Prepare the journal entries for the Trinidad Company.
4. What amount related to the consignment activities, and in what category, would the Trinidad Company report on its balance sheet on December 31, 2010? 

Reference no: EM13868962

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