Planner Corporation owns 60 percent of Schedule Company’s voting shares. During 20X3, Planner produced 27,000 computer desks at a cost of $96 each and sold 12,000 of them to Schedule for $108 each. Schedule sold 8,000 of the desks to unaffiliated companies for $136 each prior to December 31, 20X3, and sold the remainder in early 20X4 for $146 each. Both companies use perpetual inventory systems.

Required:
a. What amounts of cost of goods sold did Planner and Schedule record in 20X3?
Planner Corporation owns 60 percent of Schedule Company’s voting shares. During 20X3, Planner produced 27,000 computer desks at a cost of $96 each and sold 12,000 of them to Schedule for $108 each. Schedule sold 8,000 of the desks to unaffiliated companies for $136 each prior to December 31, 20X3, and sold the remainder in early 20X4 for $146 each. Both companies use perpetual inventory systems.

Required:
a. What amounts of cost of goods sold did Planner and Schedule record in 20X3?

b. What amount of cost of goods sold must be reported in the consolidated income statement for 20X3? (Do not round intermediate calculations.)

c. Prepare the worksheet consolidation entry or entries needed in preparing consolidated financial statements at December 31, 20X3, relating to the intercorporate sale of inventory. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

• Record the consolidation entry for the intercorporate sale of inventory.

d. Prepare the worksheet consolidation entry or entries needed in preparing consolidated financial statements at December 31, 20X4, relating to the intercorporate sale of inventory. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

• Record the consolidation entry for the intercorporate sale of inventory.

e. Prepare the worksheet consolidation entry or entries needed in preparing consolidated financial statements at December 31, 20X4, relating to the intercorporate sale of inventory if the sales were upstream. Assume that Schedule produced the computer desks at a cost of $96 each and sold 12,000 desks to Planner for $108 each in 20X3, with Planner selling 8,000 desks to unaffiliated companies in 20X3 and the remaining 4,000 in 20X4. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

• Record the consolidation entry for the intercorporate sale of inventory.

Answer rating: 100% (QA)

Part a Planner recorded cost of goods sold Schedule recorded C... View the full answer