During 2018, a parent sold inventory priced at $500,000 to its subsidiary, and the parents...
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Accounting
During 2018, a parent sold inventory priced at $500,000 to its subsidiary, and the parents profits on these sales amounted to $50,000. All inventory sold by the parent to the subsidiary was sold by the subsidiary to outside customers during 2018. Here is what the parent and subsidiary report for total sales, cost of goods sold, and ending inventory at December 31, 2018 (for total sales between the parent and subsidiary and to outside customers):
| Parent's Books | Subsidiary's Books | |
| Inventory | $ 300,000 | $ 150,000 |
| Sale revenue | 5,000,000 | 3,500,000 |
| Cost of goods sold | 4,000,000 | 2,700,000 |
At what amounts should the 2018 consolidated financial statements report these three balances?
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