Pine Company holds 60% of Spruce Company stock. Pine has sold inventory to Spruce Company as follows: Percent of Sold Sales Inventory Cost to Price to Held at Year Pine Spruce Year end 2017 $193,000 $347,000 30% 2018 $206,000 $310,000 20% 2019 $360,000 $450,000 25% 2020 $150,000 $250,000 30% The following balances were included in the individual financial statements of each company for the year ended 12/31/2020: Pine Co. Spruce Sales $ 5,100,000 3,900,000 Cost of goods sold $ 3,570,000 2,400,000 Merchandise inventory $ 580,000 390,000 a. What will be reported as consolidated sales in the year 2020? b. What will be reported as consolidated inventory at 12/31/2020? c. What will be reported as consolidated cost of goods sold for 2020? d. Were the intra-entity sales of inventory items upstream or downstream?
Pine Company holds 60% of Spruce Company stock.
Pine has sold inventory to Spruce Company as follows:
Percent of Sold Sales Inventory Cost to Price to Held at Year Pine Spruce Year end
2017 $193,000 $347,000 30%
2018 $206,000 $310,000 20%
2019 $360,000 $450,000 25%
2020 $150,000 $250,000 30%
The following balances were included in the individual financial statements of each company for the year ended 12/31/2020:
Pine Co. Spruce Sales $ 5,100,000 3,900,000
Cost of goods sold $ 3,570,000 2,400,000
Merchandise inventory $ 580,000 390,000
a. What will be reported as consolidated sales in the year 2020?
b. What will be reported as consolidated inventory at 12/31/2020?
c. What will be reported as consolidated cost of goods sold for 2020?
d. Were the intra-entity sales of inventory items upstream or downstream?
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