During 2021, Spring Company, a 70%-owned subsidiary of Brook Corporation, sold merchandise to Brook at a...
During 2021, Spring Company, a 70%-owned subsidiary of Brook Corporation, sold merchandise to Brook at a selling price of $400,000, which includes a 40% gross profit. Included in Brook's December 31, 2021, inventories were goods acquired from Spring at a billed price of $250,000. On December 31, 2020, Brook owned inventory purchased from Spring for $210,000. All sales from Spring to Brook include 40% gross profit.
Prepare all worksheet eliminations (in journal entry format) for Brook Corporation and subsidiary that would be made on the 2021 consolidated worksheet as a result of these inventory transactions. Show all computations.
Homework Answers
Spring Sold merchandise worth - $400,000 with Gross profit 40%.
Closing stock of Brook had merchandise valued - $ 250,000.
Opening stock of Brook - $210000
Opening stock has Profit of $210000*40% = $84000
Closing Stock has profit of $250000*40% = $100000
Over stated profit for Spring Dr $84000
To Over stated openning stock Brook $84000
Overstated Sale for Spring Dr $100000
To Overstated closing stock Brook $100000
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