Pit Coporation owns 75% of Stop Company's outstanding common stock. On 08/28/21, Pit sold inventory to Stop in exchange for $540,000 cash. Pit had purchased the inventory on 05/02/21 at a cost of $324,000. On 12/21/21, Stop sold 80% of the inventory to 3rd parties at a cash price of $720,000. The other 20% of the inventory remains on hand at 12/31/21. The Consolidation Entry at Year End would include:
Pit Coporation owns 75% of Stop Company's outstanding common stock. On 08/28/21, Pit sold inventory to Stop in exchange for $540,000 cash. Pit had purchased the inventory on 05/02/21 at a cost of $324,000. On 12/21/21, Stop sold 80% of the inventory to 3rd parties at a cash price of $720,000. The other 20% of the inventory remains on hand at 12/31/21. The Consolidation Entry at Year End would include:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pit Coporation owns 75% of Stop Company's outstanding common stock. On 08/28/21, Pit sold inventory to Stop in exchange for $540,000 cash. Pit had purchased the inventory on 05/02/21 at a cost of $324,000.
On 12/21/21, Stop sold 80% of the inventory to 3rd parties at a cash price of $720,000. The other 20% of the inventory remains on hand at 12/31/21.
The Consolidation Entry at Year End would include:
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