P Company acquired 75 percent of S Company on January 1, 2003 at book value. During 2003, S purchased inventory for $35,000 and sold it to P for $50,000. Of this amount, P reported $20,000 in ending inventory in 2003 and later sold it in 2004. In 2004, P sold inventory it had purchased for $40,000 to S for $60,000. S sold $45,000 of this inventory in 2004. In 2004, P reported stand-alone income of $760,000 and S reported total net income of $105,000.

a) Prepare the consolidation entries that related to inter-company sale of inventory at December 31, 2003

b) Prepare the consolidation entries that related to inter-company sale of inventory at December 31, 2004

Answer rating: 100% (QA)

Solution ca The Consoli dation entsies thet related to Pnter company Sate of inven... View the full answer