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A subsidiary sells inventory to its parent at a markup of 30% on cost. in 2019,...

A subsidiary sells inventory to its parent at a markup of 30% on cost. in 2019, the parent paid $650,000 for merchandise received from the subsidiary. The parent sold $455,000 of the inventory to outside parties and the remaining $195,000 is stored in a warehouse. Write the elimination entries needed for the 2019 consolidation worksheet for the inter company inventory sales

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Answer #1
Ending Inventory at 30% Markup of subsidiary $ 195,000
Less: Unrealized Profit of subsidiary company [($ 195,000/1.3) * 0.3] $ 45,000
Ending inventory less unrealized profit $ 150,000
Particular Debit Credit
Sales $ 195,000
Cost of Goods Sold $ 150,000
Inventory $ 45,000
(To record entries to eliminate unrealized gain and losses)
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