Question

w ith Co. This is worth 52 points Smith Co. acquired 100% of Cars Carson, Inc. for $520.000 the end of the year. In their pre-con and $750,000 for Carson, Inc. ne, for of Carson Inc 2017 During 2017. Sm cost Smith Co $300.000 Carson Inc still owned or pre-consolidation books cost of goods sold was 2017 During 2017. Smith Co. sold goods to 0.000. Carson, Inc. still owned 40% of the goods at Ok, cost of goods sold was $2.010.000 for Smith Co. Prepare all consolidation entries related Enter the Account name and the an untries related to inventory and cost of goods sold for 2017 the amount of either debitor credit in the applicable column. Account Compute consolidated cost of goods sold for 2017 Consolidated cost of goods sold $ Assuming that the remainder of the inventory was sold to third parties during 2018, prepare the 2018 consolidation entry to recognize the previously deferred profit. Enter the Account name and the amount of either debit or credit in the applicable column. Account

Answer 1

PI working notes Calentation of a coross sold to Case on. Inc. profit Rate on goods lososs Profit Rate = sales - Cost of Sales Goods sol, SU100 520,000 - 390,000.00 520,ooo -25). unsold stock of Casson. a 40.1 of the goods - 520.00040-). = 120.000 Unrealised profit = 130.000 * 257). $32.500 32,500. dre) I (16) Reserse & suplus All 32.500 to Inventory Being unrealised Bufit eliminal ted from wnsolidation) 5200ool to cast of boods sold, 520.000 Being Conta entry cancelled) . No & uformation given for their Debtor and editor.. Sales

① Compulation of unsolidated cots for 2017 - Cogs of smith wet coGs of cassonne. a value of inventry transfered from smith to Carson 2010,000 + 450,000 - 520,000 - $22. 40,00 o During 2018 when the remaining inventory were sold to third panty , the previously Deferred profit (Unrealised profit) were sealised in 2018. Therefore, consolidation entry for the same I do 8 32,500 us Inventory To Reserve & susplus 132.500