Chap007_Classproblems_solu

Chap007_Classproblems_solu - Solutions to Chapter 7 Inclass...

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Solutions to Chapter 7 In‐class Problems 1 E7-6 Realized Profit on Intercompany Sale a. Journal entries recorded by Nordway Corporation: (1) Inventory 960,000 Cash (Accounts Payable) 960,000 (2) Cash (Accounts Receivable) 750,000 Sales 750,000 (3) Cost of Goods Sold 600,000 Inventory 600,000 b. Journal entries recorded by Olman Company: (1) Inventory 750,000 Cash (Accounts Payable) 750,000 (2) Cash (Accounts Receivable) 1,125,000 Sales 1,125,000 (3) Cost of Goods Sold 750,000 Inventory 750,000 c. Eliminating entry: E(1) Sales 750,000 Cost of Goods Sold 750,000
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2 E7-7 Sale of Inventory to Subsidiary a. Journal entries recorded by Nordway Corporation: (1) Inventory 960,000 Cash (Accounts Payable) 960,000 (2) Cash (Accounts Receivable) 750,000 Sales 750,000 (3) Cost of Goods Sold 600,000 Inventory 600,000 b. Journal entries recorded by Olman Company: (1) Inventory 750,000 Cash (Accounts Payable) 750,000 (2) Cash (Accounts Receivable) 810,000 Sales
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Chap007_Classproblems_solu - Solutions to Chapter 7 Inclass...

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