Planet Corporation acquired 90 percent of Saturn Company's voting shares of stock in 20X1. During 20X4, Planet purchased 40,000 Playday doghouses for $24 each and sold 25,000 of them to Saturn for $30 each. Saturn sold 18,000 of the doghouses to retail establishments prior to December 31, 20X4, for $45 each. Both companies use perpetual inventory systems.

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 3RE: Shaquille Corporation began the current year with inventory of 50,000. During the year, its...
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8.
Planet Corporation acquired 90 percent of Saturn Company's voting shares of stock in 20X1. During 20X4, Planet purchased 40,000
Playday doghouses for $24 each and sold 25,000 of them to Saturn for $30 each. Saturn sold 18,000 of the doghouses to retail
establishments prior to December 31, 20X4, for $45 each. Both companies use perpetual inventory systems.
Transcribed Image Text:8. Planet Corporation acquired 90 percent of Saturn Company's voting shares of stock in 20X1. During 20X4, Planet purchased 40,000 Playday doghouses for $24 each and sold 25,000 of them to Saturn for $30 each. Saturn sold 18,000 of the doghouses to retail establishments prior to December 31, 20X4, for $45 each. Both companies use perpetual inventory systems.
c. Prepare the worksheet consolidation entry(ies) needed in preparing consolidated financial statements for 20X4 to remove the
effects of the intercompany sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first
account field.)
No.
A
Answer is complete but not entirely correct.
Entry
1
Sales
Cost of goods sold
Inventory
Accounts
Debit
Credit
750,000
600,000
150,000
Transcribed Image Text:c. Prepare the worksheet consolidation entry(ies) needed in preparing consolidated financial statements for 20X4 to remove the effects of the intercompany sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No. A Answer is complete but not entirely correct. Entry 1 Sales Cost of goods sold Inventory Accounts Debit Credit 750,000 600,000 150,000
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