Accounting upstream/downstream

Please explain how to get this

Record journal entries

The entries are

Equity Method Entries on Bell Co.'s Books:

Investment in Troll Corp.

18,000

Income from Troll Corp.

18,000

Record Bell Co.'s 60% share of Troll Corp.'s 20X2 income

Cash

6,000

Investment in Troll Corp.

6,000

Record Bell Co.'s 60% share of Troll Corp.'s 20X2 dividend

Income from Troll Corp.

6,500

Investment in Troll Corp.

6,500

Eliminate the deferred gross profit from downstream sales in 20X2

Investment in Troll Corp.

2,040

Income from Troll Corp.

2,040

Reverse of the deferred gross profit from upstream sales in 20X1

Income from Troll Corp.

2,520

Investment in Troll Corp.

2,520

Eliminate the deferred gross profit from upstream sales in 20X2

Can you please explain how to get the numbers for the deferred gross profits? Thank you.

Adjustment to Basic Consolidation Entry
	NCI		Bell Co.
Net Income	12,000		18,000
+Reverse GP deferral (up)	1,360		2,040
- Gross profit deferral (down)			(6,500)
- Gross profit deferral (up)	(1,680)		(2,520)
Income to be eliminated	11,680		11,020
-------------------------------------------------------------------------------------
Ending Book Value	68,000		102,000
+Reverse GP deferral (up)	1,360		2,040
- Gross profit deferral (down)			(6,500)
- Gross profit deferral (up)	(1,680)		(2,520)
Adjusted Book Value	67,680		95,020

Consolidation Following inventory Transactions Bell Company purchased 60 percent ownership of Troll Corporation on January 1, 20xi, for $82,800. On that date, the noncontrolling interest had a fair value of $55,200 and Troll reported common stock outstanding of $100,000 and retained earnings of $20,000. The full amount of the differential is assigned to land to be used as a future building site. Bell uses the fully adjusted equity method in accounting for its ownership of Troll. On December 31, 20X2, the trial balances of the two companies are as follows: Bell Company Troll Corporation Debit Credit Debit Credit Item Cash and Accounts Receivable 69,400 51,200 55,000 60,000 Inventory 30,000 Land 40,000 Buildings & Equipment 520,000 350,000 nvestment in Troll Corporation Stock 103,780 Cost of Goods Sold 99,800 61,000 Depreciation Expense 25,000 15,000 Interest Expense 6,000 14,000 Dividends Declared 40,000 10,000 Accumulated Depreciation $175,000 75,000 68,800 Accounts Payable 41,200 80,000 Bonds Payable 200,000 Bond Premium 1,200 Common Stock 200,000 100,000 227,960 Retained Earnings 50,000 200,000 120,000 Sales Income from Subsidiary 11,020 $963,980 $963,980 $586,200 $586,200 Troll sold inventory costing $25,500 to Bell for $42,500 in 20X1. Bell resold 80 percent of the pur chase in 20Xi and the remainder in 20X2. Troll sold inventory costing $21,000 to Bell in 20X2 for $35,000, and Bell resold 70 percent of it prior to December 31, 20X2. In addition, Bell sold inven- tory costing $14,000 to Troll for $28,000 in 20X2, and Troll resold all but $13,000 of its purchase prior to December 31, 20X2 Assume both companies use straight-line depreciation and that no property, plant, and equipment has been purchased since the acquisition