Pit Corporation owns 80% of Stop Company's outstanding common stock. On 08/28/20, Pit sold inventory to...

  

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Pit Corporation owns 80% of Stop Company's outstanding common stock. On 08/28/20, Pit sold inventory to Stop in exchange for $500,000 cash. Pit had purchased the inventory on 05/02/20 at a cost of $375,000. On 12/20/20, Stop sold 60% of the inventory to 3rd parties at a cash price of $400,000. The other 40% of the inventory remains on hand at 12/31/20. IN ORDER TO EARN FULL CREDIT, BE SURE TO CLEARLY SHOW ALL YOUR WORK. Requirement 1: Requirement 2: Prepare the journal entries that would be recorded on Pit's and Stop's books during 2020. (10 POINTS) Prepare the 12/31/20 consolidation worksheet entry related to these transactions. Feel free to use the templates provided below. (20 POINTS) Account Account P's G/L P's G/L S's G/L S's G/L WE HAVE: Combined G/L Bals WHICH LEADS TO....... WE HAVE: Combined G/L Bals Consolidation Entries credit debit WE NEED: Consolidated Amounts CALCULATIONS: ADJUSTMENT WE NEED: Consolidated Amounts Pit Corporation owns 80% of Stop Company's outstanding common stock. On 01/01/20, Pit sold a used piece of equipment to Stop in exchange for $245,000 cash. Pit's original cost of the equipment was $890,000 and accumulated depreciation at 01/01/20 was $620,000. The remaining useful life of the equipment is 8 years, and Stop will use that same useful life. Both companies use the straight-line method of depreciation. IN ORDER TO EARN FULL CREDIT, BE SURE TO CLEARLY SHOW ALL YOUR WORK. Requirement 1: Requirement 2: Prepare the journal entries that would be recorded on Pit's and Stop's books during 2020. (10 POINTS) Prepare the 12/31/20 consolidation worksheet entry related to these transactions. Feel free to use the templates provided below. (20POINTS) Account Account P's G/L P's G/L S's G/L S's G/L WE HAVE: Combined G/L Bals WE HAVE: Combined G/L Bals WHICH LEADS TO....... WE NEED: Consolidated Amounts Consolidation Entries credit debit ADJUSTMENT WE NEED: Consolidated Amounts Pit Corporation owns 80% of Stop Company's outstanding common stock. On 08/28/20, Pit sold inventory to Stop in exchange for $500,000 cash. Pit had purchased the inventory on 05/02/20 at a cost of $375,000. On 12/20/20, Stop sold 60% of the inventory to 3rd parties at a cash price of $400,000. The other 40% of the inventory remains on hand at 12/31/20. IN ORDER TO EARN FULL CREDIT, BE SURE TO CLEARLY SHOW ALL YOUR WORK. Requirement 1: Requirement 2: Prepare the journal entries that would be recorded on Pit's and Stop's books during 2020. (10 POINTS) Prepare the 12/31/20 consolidation worksheet entry related to these transactions. Feel free to use the templates provided below. (20 POINTS) Account Account P's G/L P's G/L S's G/L S's G/L WE HAVE: Combined G/L Bals WHICH LEADS TO....... WE HAVE: Combined G/L Bals Consolidation Entries credit debit WE NEED: Consolidated Amounts CALCULATIONS: ADJUSTMENT WE NEED: Consolidated Amounts Pit Corporation owns 80% of Stop Company's outstanding common stock. On 01/01/20, Pit sold a used piece of equipment to Stop in exchange for $245,000 cash. Pit's original cost of the equipment was $890,000 and accumulated depreciation at 01/01/20 was $620,000. The remaining useful life of the equipment is 8 years, and Stop will use that same useful life. Both companies use the straight-line method of depreciation. IN ORDER TO EARN FULL CREDIT, BE SURE TO CLEARLY SHOW ALL YOUR WORK. Requirement 1: Requirement 2: Prepare the journal entries that would be recorded on Pit's and Stop's books during 2020. (10 POINTS) Prepare the 12/31/20 consolidation worksheet entry related to these transactions. Feel free to use the templates provided below. (20POINTS) Account Account P's G/L P's G/L S's G/L S's G/L WE HAVE: Combined G/L Bals WE HAVE: Combined G/L Bals WHICH LEADS TO....... WE NEED: Consolidated Amounts Consolidation Entries credit debit ADJUSTMENT WE NEED: Consolidated Amounts