Parent company transferred inventory to its 60% owned subsidiary in 2020. The transfer price was $240,000...

 

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Parent company transferred inventory to its 60% owned subsidiary in 2020. The transfer price was $240,000 and the goods cost $180,000. By the end of the year inventory on hand are valued at $48,000 transfer price. Parent company uses the equity method in its internal records. Khalid prepared the following consolidation entry "G without amounts in 2021: "G Investment in Subsidiary (60%) Retained Earnings-Subsidiary (40%) Cost of Goods Sold Required: XXX XXXX XXXXX 1. Do you agree with Khalid? 2. If you don't agree calculate the necessary amount and record the proper journal entry. Parent company transferred inventory to its 60% owned subsidiary in 2020. The transfer price was $240,000 and the goods cost $180,000. By the end of the year inventory on hand are valued at $48,000 transfer price. Parent company uses the equity method in its internal records. Khalid prepared the following consolidation entry "G without amounts in 2021: "G Investment in Subsidiary (60%) Retained Earnings-Subsidiary (40%) Cost of Goods Sold Required: XXX XXXX XXXXX 1. Do you agree with Khalid? 2. If you don't agree calculate the necessary amount and record the proper journal entry.

Answer rating: 100% (QA)

Answer to Question Part 1 No I dont agree with the Khalid The entry passed ... View the full answer