Chap007_Day1_class

Chap007_Day1_class - 1 Chapter 7 Intercompany Inventory...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 1 Chapter 7 Intercompany Inventory Transactions elimination entries when parent uses basic equity method parent and sub use perpetual inventory systems work the following in class E 7-6, 7 2 Assume parent sells inventory to sub 4 Possible Situations At the end of the year of sale: Sub sold to an outsider before year end Sub did not sell, therefore goods are in Subs ending inventory At the end of the next year sub still did not sell, therefore goods are still in Subs ending inventory Sub sold to outsider before year end 3 Facts for our Example Co. A owns 70% of Co. B Co. A purchased goods for $3,000 Co. A sold goods to Co. B for $10,000 Co. B sold goods to outsider for $12,000 4 1. Year of internal sale, 100% sold We need to eliminate the sale of $10,000 recorded by A and the Cost of Goods Sold of $10,000 recorded by B, none of the goods remain in Ending Inventory . 5 1. Year of internal sale, 100% sold We need to eliminate the sale of $10,000 recorded by A...
View Full Document

Page1 / 19

Chap007_Day1_class - 1 Chapter 7 Intercompany Inventory...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online