P CO owns a 90% interest in S Co, purchased at a time when the book values of S recorded assets and liabilities were equal to fair values. During 2014, S sold merchandise to P cost 80,000 for $64,000 . At December 31, 2014, 25% of this merchandise is sold to third party . Separate incomes for P&S are summarized as follows: P S Sales $900,000 $200,000 Cost of sales 400,000 100,000 Gross profit 500,000 100,000 Operating expenses 200,000 80,000 Separate income $300,000 $ 20,000 Prepare Prepare all journal entries and elimination entries on 31/12/2019 Prepare a consolidated income statement for 2014 for P and s
P CO owns a 90% interest in S Co, purchased at a time when the book values of S recorded assets and liabilities were equal to fair values. During 2014, S sold merchandise to P cost 80,000 for $64,000 . At December 31, 2014, 25% of this merchandise is sold to third party . Separate incomes for P&S are summarized as follows: P S Sales $900,000 $200,000 Cost of sales 400,000 100,000 Gross profit 500,000 100,000 Operating expenses 200,000 80,000 Separate income $300,000 $ 20,000 Prepare Prepare all journal entries and elimination entries on 31/12/2019 Prepare a consolidated income statement for 2014 for P and s
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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P CO owns a 90% interest in S Co, purchased at a time when the book values of S recorded assets and liabilities were equal to fair values. During 2014, S sold merchandise to P cost 80,000 for $64,000 . At December 31, 2014, 25% of this merchandise is sold to third party . Separate incomes for P&S are summarized as follows:
P S
Sales $900,000 $200,000
Cost of sales 400,000 100,000
Gross profit 500,000 100,000
Operating expenses 200,000 80,000
Separate income $300,000 $ 20,000
Prepare
Prepare all journal entries and elimination entries on 31/12/2019
Prepare a consolidated income statement for 2014 for P and s
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