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Karlow Corporation owns 70 percent of Draw Company’s voting shares...

Karlow Corporation owns 70 percent of Draw Company’s voting shares...

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Author: willi padro
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http://homework.plus/karlow-corporation-owns-70-percent-of-draw-companys-voting-shares-during-20x3-karlow-produced-29-000-computer/

Karlow Corporation owns 70 percent of Draw Company’s voting shares. During 20X3, Karlow produced 29,000 computer desks at a cost of $96 each and sold 14,000 of them to Draw for $108 each. Draw sold 9,000 of the desks to unaffiliated companies for $142 each prior to December 31, 20X3, and sold the remainder in early 20X4 for $152 each. Both companies use perpetual inventory systems.
1.  Prepare the worksheet consolidation entry or entries needed in preparing consolidated financial statements at December 31, 20X3, relating to the intercorporate sale of inventory.
 
2.  Prepare the worksheet consolidation entry or entries needed in preparing consolidated financial statements at December 31, 20X4, relating to the intercorporate sale of inventory.
 
3.  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 Draw produced the computer desks at a cost of $96 each and sold 14,000 desks to Karlow for $108 each in 20X3, with Karlow selling 9,000 desks to unaffiliated companies in 20X3 and the remaining 5,000 in 20X4.


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