Using the Panther Corp. and Subsidiary consolidation from Part 1 of the Chapter 3 & 4 Quiz. Assume the following additional facts:

In 20X1, Panther had sales of goods to Scott totaling $100,000 of sales revenue at a profit of 75% evenly distributed over the year. At December 31, 20X1, Scott still had two months of the goods it received from Panther in 20X1 on hand.

In 20X2, Panther had sales of goods to Scott totaling $150,000 of sales revenue producing a profit of $120,000 evenly distributed over the year. At December 31, 20X2, Scott still had three months of the goods it received from Panther in 20X2 on hand. For ease of including the above in your pre-existing consolidation, assume both companies are presenting “Inventories” in their reported “Other Current Assets” and “Cost of Goods Sold” in their reported “Expenses.”

Required: 1) Prepare the journal entries to eliminate the intercompany sales and profits in the consolidated financial statements of Panther Corp. and Subsidiary as of and for each of the years ended December 31, 20X1 and 20X2, respectively.

2) Revise your consolidating worksheet for Panther Corp. and Subsidiary to properly record the journal entries to eliminate the intercompany sales and profits as of and for the year ended December 31, 20X2.

Answer rating: 100% (QA)

1 Income tax rate 30 Part 1 1 Scott purchases inventory from Panther Corp Inventory 100000 Accounts ... View the full answer