7-23 - 7-23 Eliminations for Upstream Sales BIP= 60,000...

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Unformatted text preview: 7-23 Eliminations for Upstream Sales BIP= 60,000 40,000 = 20,000 EI = 45,000 EIP=15,000 (45,000x 50,000/150,000) Gross Profit %= GP/Sales = 50/150 = 33.3% 150,000 100,000 C S Equity method entries: Investment in S Income from S Net income (40,000 x 80%) 32,000 32,000 a. Eliminating entries, December 31, 20X8: E(1) Income from Subsidiary Investment in Superior Filter Stock Eliminate income from subsidiary. Income to Noncontrolling Interest Noncontrolling Interest Assign income to noncontrolling interest. 40,000 +20,000-15,000=45,000 x 20% = 9,000 Common Stock -- Superior Filter Company Retained Earnings, January 1 Investment in Superior Filter Stock Noncontrolling Interest Eliminate beginning investment balance. Retained Earnings, January 1 Noncontrolling Interest Cost of Goods Sold Eliminate beginning inventory profit. Sales Cost of Goods Sold 32,000 32,000 9,000 9,000 E(2) E(3) 90,000 220,000 248,000 62,000 16,000 4,000 20,000 150,000 135,000 E(4) E(5) Inventory 15,000 723 continued Entries if the periodic inventory method had been used: Sales Purchases E. Inventory (IS) E. Inventory (BS) 15,000 15,000 150,000 150,000 ...
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7-23 - 7-23 Eliminations for Upstream Sales BIP= 60,000...

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