Homework Help is Here – Start Your Trial Now!
Business
Accounting
pstream Intercompany Merchandise Transactions mmitz Inc. is a subsidiary of Krocker Gear. Jimmitz sells shoe accessories to Krocker at a 25% markup on cost. Information on these intero $11,250 nventory balance on Krocker's books, purchased from Jimmitz, January 1, 2020 nventory balance on Krocker's books, purchased from Jimmitz, December 31, 2020 Total sales revenue recorded by Jimmitz on merchandise sales to Krocker in 2020 10,250 1,500,000 equired a. Prepare the working paper eliminating entries related to these intercompany transactions at December 31, 2020. Description Debit Credit Retained earnings, beg. - Krocker Cost of goods sold To eliminate the intercompany profit from Krocker's beg. Inventory. Sales revenue ✔ Cost of goods sold • To eliminate intercompany sales and purchases. Cost of goods sold 2,250 1,500,000 ✓ 0✓ 2,050 2.250 0✔ 1,500,000

pstream Intercompany Merchandise Transactions mmitz Inc. is a subsidiary of Krocker Gear. Jimmitz sells shoe accessories to Krocker at a 25% markup on cost. Information on these intero $11,250 nventory balance on Krocker's books, purchased from Jimmitz, January 1, 2020 nventory balance on Krocker's books, purchased from Jimmitz, December 31, 2020 Total sales revenue recorded by Jimmitz on merchandise sales to Krocker in 2020 10,250 1,500,000 equired a. Prepare the working paper eliminating entries related to these intercompany transactions at December 31, 2020. Description Debit Credit Retained earnings, beg. - Krocker Cost of goods sold To eliminate the intercompany profit from Krocker's beg. Inventory. Sales revenue ✔ Cost of goods sold • To eliminate intercompany sales and purchases. Cost of goods sold 2,250 1,500,000 ✓ 0✓ 2,050 2.250 0✔ 1,500,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Please help me with what i have got wrong.

Upstream Intercompany Merchandise Transactions Jimmitz Inc. is a subsidiary of Krocker Gear. Jimmitz sells shoe accessories to Krocker at a 25% markup on cost. Information on these intercompany merchandise transactions is below: Inventory balance on Krocker's books, purchased from Jimmitz, January 1, 2020 Inventory balance on Krocker's books, purchased from Jimmitz, December 31, 2020 Total sales revenue recorded by Jimmitz on merchandise sales to Krocker in 2020 $11,250 10,250 1,500,000 Required a. Prepare the working paper eliminating entries related to these intercompany transactions at December 31, 2020. Description Credit Retained earnings, beg. - Krocker + ✓ Debit 2,250 ✓ 0✔ Cost of goods sold ✓ 2,250 ✓ To eliminate the intercompany profit from Krocker's beg. Inventory. Sales revenue + 1,500,000 ✓ 0✔ 1,500,000 ✓ Cost of goods sold ✓ To eliminate intercompany sales and purchases. Cost of goods sold + ✓ 2,050 ✓ 0 ✓ Inventories 0✔ 2.050 ✓ To eliminate the intercompany profit from Krocker's ending inventory. b. Krocker sold shoes containing Jimmitz's shoe accessories during 2020. What amount did Krocker and Jimmitz record as cost of goods sold for the shoe accessories in 2020? Krocker: $ 1,501,000 Jimmitz: $ 281,500 X What amount should appear in consolidated cost of goods sold for these shoe accessories? $ 1,200,800 Show how the eliminating entries in part a adjust Krocker's cost of goods sold balance to the correct consolidated balance. Note: Enter your "Credit" answers in the same order that they were entered in part a. Consolidated Balances Krocker Dr (Cr) Cost of goods sold $ 1,501,000 Jimmitz Dr (Cr) Account Credit Debit 300,200 * Dr (Cr) $1,200,800✔ 0 x 1,200,800 x $ 300,200 x +
Transcribed Image Text:Upstream Intercompany Merchandise Transactions Jimmitz Inc. is a subsidiary of Krocker Gear. Jimmitz sells shoe accessories to Krocker at a 25% markup on cost. Information on these intercompany merchandise transactions is below: Inventory balance on Krocker's books, purchased from Jimmitz, January 1, 2020 Inventory balance on Krocker's books, purchased from Jimmitz, December 31, 2020 Total sales revenue recorded by Jimmitz on merchandise sales to Krocker in 2020 $11,250 10,250 1,500,000 Required a. Prepare the working paper eliminating entries related to these intercompany transactions at December 31, 2020. Description Credit Retained earnings, beg. - Krocker + ✓ Debit 2,250 ✓ 0✔ Cost of goods sold ✓ 2,250 ✓ To eliminate the intercompany profit from Krocker's beg. Inventory. Sales revenue + 1,500,000 ✓ 0✔ 1,500,000 ✓ Cost of goods sold ✓ To eliminate intercompany sales and purchases. Cost of goods sold + ✓ 2,050 ✓ 0 ✓ Inventories 0✔ 2.050 ✓ To eliminate the intercompany profit from Krocker's ending inventory. b. Krocker sold shoes containing Jimmitz's shoe accessories during 2020. What amount did Krocker and Jimmitz record as cost of goods sold for the shoe accessories in 2020? Krocker: $ 1,501,000 Jimmitz: $ 281,500 X What amount should appear in consolidated cost of goods sold for these shoe accessories? $ 1,200,800 Show how the eliminating entries in part a adjust Krocker's cost of goods sold balance to the correct consolidated balance. Note: Enter your "Credit" answers in the same order that they were entered in part a. Consolidated Balances Krocker Dr (Cr) Cost of goods sold $ 1,501,000 Jimmitz Dr (Cr) Account Credit Debit 300,200 * Dr (Cr) $1,200,800✔ 0 x 1,200,800 x $ 300,200 x +
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Morals and Ethics
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS