Pit Coporation owns 75% of Stop Company's outstanding common stock. On 08/28/21, Pit sold inventory to Stop in exchange for $540,000 cash. Pit had purchased the inventory on 05/02/21 at a cost of $324,000. On 12/21/21, Stop sold 80% of the inventory to 3rd parties at a cash price of $720,000. The other 20% of the inventory remains on hand at 12/31/21. Pit's Journal Entries would include: To Acquire The Inventory: A debit to Inventory and a credit to Cash in the amount of: To Sell the Inventory to Stop: A debit to Cash and a credit to Sales in the amount of: A debit to Cost of Goods Sold
Pit Coporation owns 75% of Stop Company's outstanding common stock. On 08/28/21, Pit sold inventory to Stop in exchange for $540,000 cash. Pit had purchased the inventory on 05/02/21 at a cost of $324,000. On 12/21/21, Stop sold 80% of the inventory to 3rd parties at a cash price of $720,000. The other 20% of the inventory remains on hand at 12/31/21. Pit's Journal Entries would include: To Acquire The Inventory: A debit to Inventory and a credit to Cash in the amount of: To Sell the Inventory to Stop: A debit to Cash and a credit to Sales in the amount of: A debit to Cost of Goods Sold
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pit Coporation owns 75% of Stop Company's outstanding common stock. On 08/28/21, Pit sold inventory to Stop in exchange for $540,000 cash. Pit had purchased the inventory on 05/02/21 at a cost of $324,000.
On 12/21/21, Stop sold 80% of the inventory to 3rd parties at a cash price of $720,000. The other 20% of the inventory remains on hand at 12/31/21.
Pit's
To Acquire The Inventory:
A debit to Inventory and a credit to Cash in the amount of:
To Sell the Inventory to Stop:
A debit to Cash and a credit to Sales in the amount of:
A debit to Cost of Goods Sold and a credit to Inventory in the amount of:
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