At the reporting date, Prattson reports a $11,700 receivable from Stollbert, and Stollbert reports a $5,100 receivable from Prattson.

During the year, Prattson sold $210,000 of goods to Stollbert on the same terms as sales made to third parties. Stollbert sold 60% of this inventory to others. Prattson had total sales of $1,000,000 for the year and total cost of goods sold of $750,000. Stollbert's sales to third parties totaled $440,000 with related cost of goods sold of $390,000.

During the year, Stollbert sold a piece of equipment to Prattson that had 5 years of useful life remaining. The sale price was $88,000, and the carrying amount was $76,000. Prattson had $15,200 of depreciation expense for the year and Stollbert had $8,500. 

Both companies depreciate their items of property, plant, and equipment using the straight-line depreciation method.

During the year, Prattson purchased for cash all the outstanding bonds of Stollbert for $2.8 million. The bonds had a face amount of $3 million. On the date of the purchase, the remaining unamortized discount was $300,000.

Enter the appropriate amounts to be adjusted in the preparation of consolidated statements in the designated cells below. Enter all amounts as positive values. Round all amounts to the nearest dollar. If no entry is necessary, enter a zero (0).

 

Transcribed Image Text:

Item 1. Prattson receivable from Stollbert 2. Stollbert receivable from Prattson 3. Sales 4. Gain on sale of equipment 5. Depreciation expense of equipment 6. Loss related to bond acquisition Adjustment amount Item 1. Prattson receivable from Stollbert 2. Stollbert receivable from Prattson 3. Sales 4. Gain on sale of equipment 5. Depreciation expense of equipment 6. Loss related to bond acquisition Adjustment amount

Answer rating: 100% (QA)

1 Prattson receivable from Stollbert Prattson receivable from Sto... View the full answer