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  3. 1. a. poison co. buys inventory from savory, inc.,

1. a. Poison Co. buys inventory from Savory, Inc., their 80%-owned subsidiary, paying $10k. S...

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Accounting

1. a. Poison Co. buys inventory from Savory, Inc., their 80%-owned subsidiary, paying $10k. S had originally purchased the inventory for 7k. 3 years later, when P sells the inventory to Q Co. for 11k, what should the related workpaper entry be? Assume consolidated tax filing. [MI/NCI: 600 dr.] b. What additional entry would be made if P and S filed taxes separately? Assume a 40% tax rate. c. How would the entries in a. and b. appear had the interfirm transfer been downstream?

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