Planet Corporation acquired 90 percent of Saturn Company’s voting shares of stock in 20X1. During 20X4, Planet purchased 48,000 Playday doghouses for $28 each and sold 33,000 of them to Saturn for $35 each. Saturn sold 26,000 of the doghouses to retail establishments prior to December 31, 20X4, for $50 each. Both companies use perpetual inventory systems. Required: Prepare all journal entries Planet recorded for the purchase of inventory and resale to Saturn Company in 20X4. Prepare the journal entries Saturn recorded for the purchase of inventory and resale to retail establishments in 20X4. Prepare the worksheet consolidation entry(ies) needed in preparing consolidated financial statements for 20X4 to remove the effects of the intercompany sale.
Planet Corporation acquired 90 percent of Saturn Company’s voting shares of stock in 20X1. During 20X4, Planet purchased 48,000 Playday doghouses for $28 each and sold 33,000 of them to Saturn for $35 each. Saturn sold 26,000 of the doghouses to retail establishments prior to December 31, 20X4, for $50 each. Both companies use perpetual inventory systems. Required: Prepare all journal entries Planet recorded for the purchase of inventory and resale to Saturn Company in 20X4. Prepare the journal entries Saturn recorded for the purchase of inventory and resale to retail establishments in 20X4. Prepare the worksheet consolidation entry(ies) needed in preparing consolidated financial statements for 20X4 to remove the effects of the intercompany sale.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 1RE: Rescue Sequences LLC purchased inventory by issuing a 30,000, 10%, 60-day note on October 1. Prepare...
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Planet Corporation acquired 90 percent of Saturn Company’s voting shares of stock in 20X1. During 20X4, Planet purchased 48,000 Playday doghouses for $28 each and sold 33,000 of them to Saturn for $35 each. Saturn sold 26,000 of the doghouses to retail establishments prior to December 31, 20X4, for $50 each. Both companies use perpetual inventory systems.
Required:
-
Prepare all
journal entries Planet recorded for the purchase of inventory and resale to Saturn Company in 20X4. - Prepare the journal entries Saturn recorded for the purchase of inventory and resale to retail establishments in 20X4.
- Prepare the worksheet consolidation entry(ies) needed in preparing consolidated financial statements for 20X4 to remove the effects of the intercompany sale.
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