Selected accounts from the year-to-date financial statements for Nowak Company and its wholly owned subsidiary, Shawinigan Ltd., were as follows: 

Additional Information 

• The above statements include the only intercompany transaction this year which was a cash sale of $600 by Nowak to Shawinigan at its regular margin of 30% of sales and accrued income tax at its tax rate of 40%. 

• Today, Shawinigan sold $400 of the inventory it had purchased from Nowak to an arm’s length party at its regular markup of 30% over cost and accrued income tax at its tax rate of 40%.

Required 

Determine the account balance for each account on the three financial statements after the new transaction is recorded. 

Transcribed Image Text:

Cash Inventory Deferred income tax asset Sales Cost of sales Income tax expense Nowak $ 570 750 210 9,100 6,370 910 Shawinigan $ 180 1,740 90 5,200 4,000 450 Consolidated $ 750 2,310 372 13,700 8,800 1,340