Asked by Ashley Hewett on Jul 22, 2024
Verified
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 2020, Virginia made cash sales of $400,000 to Stateside. The gross profit rate was 30% of the selling price. By the end of 2020, Stateside had sold 75% of the goods to outside parties for $420,000 cash.Prepare any 2021 consolidation worksheet entries that would be required regarding the 2020 inventory transfer.
Perpetual Inventory Method
An inventory management system where updates are made continuously to record sales and purchases instantly, maintaining constant and accurate inventory records.
Consolidation Worksheet
A tool used in accounting to combine the financial statements of parent and subsidiary companies into a single document for analysis.
Inventory Transfer
The movement of goods from one location to another, typically between departments or segments within a company.
- Develop consolidation statements for financial reporting, accounting for inter-entity transactions adjustments.
Verified Answer
HE
Learning Objectives
- Develop consolidation statements for financial reporting, accounting for inter-entity transactions adjustments.