Business, 21.10.2021 02:20, Meap12345678910
Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2018, the companies had the following account balances:
Akron Sales Cost of goods sold Operating expenses Investment income Dividends declared Toledo 1,100,000 600,000 500,000 400,000 400,000 220,000 Not given 80,000 30,000
Intra-entity sales of $320,000 occurred during 2017 and again in 2018. This merchandise cost $240,000 each year. Of the total transfers, $70,000 was still held on December 31, 2017, with $50,000 unsold on December 31, 2018.
1. Prepare the consolidation entries required by Akron in 2018.
(a) Prepare Entry *G to remove the 2017 intra-entity gross profit from the beginning account balances.
(b) Prepare Entry E to recognize the excess amortization expense for the current period.
(c) Prepare Entry TI to eliminiate the intra-entity transfers of inventory during 2018.
(d) Prepare Entry G to remove the 2018 intra-entity gross profit from the ending account balances.
2. Prepare a consolidated income statement for the year ending December 31, 2018.
Answers: 1
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Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per y...
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