Question

E6-8 Inventory Transfer between Parent and Subsidiary Planner Corporation owns 60 percent of Schedule Company's voting shares. During 20X3, Plan- ner produced 25,000 computer desks at a cost of $82 each and sold 10,000 of them to Schedule for $94 each. Schedule sold 7,000 of the desks to unaffiliated companies for $130 each prior to December 31, 20X3, and sold the remainder in early 20X4 for $140 each. Both companies use perpetual inventory systems.

Answer 1

In managerial accounting, the transfer price represents a price at which one subsidiary, or upstream division, of the company, sells goods and services to the other subsidiary or downstream division. Goods and services can include labor, components, and parts used in production and general consulting services.

Inventory Transfer price is $ 82,

note : while consolidating unrealized profit on inventory held at the end of year  should be eliminated.