Question
In: Accounting
Virginia Corp. owned all of the voting common stock of Stateside Co. Both companies use the...
Virginia Corp. owned all of the voting common stock of Stateside Co. Both companies use the perpetual inventory method, and Virginia decided to use the partial equity method to account for this investment. During 2017, Virginia made cash sales of $400,000 to Stateside. The gross profit rate was 30% of the selling price. By the end of 2017, Stateside had sold 75% of the goods to outside parties for $420,000 cash.
1. Prepare journal entries for Virginia and Stateside to record the sales/purchases during 2017.
2. Prepare the consolidation entries that should be made at the end of 2017.
3. Prepare any 2018 consolidation worksheet entries that would be required regarding the 2017 inventory transfer.
Solutions
Expert Solution
First 2 parts of the solution are given in the image above. Kindly, refer third part of the solution below :-
Retained Earnings A/c Dr $30,000
To Cost of Goods Sold $30,000
ekkarill92 answered 2 years agoRelated Solutions
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