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Intercompany Transactions Using the data below, perform the accounting required for to eliminate each independent...

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Accounting

Intercompany Transactions

Using the data below, perform the accounting required for to eliminate each independent intercompany transaction:

1. Prepare the book calculations.

2. Perform the required journal entries.

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Assume that Parent Company decides to sell $5,000 of Inventory to Sub for $7,000 cash. Show the sale and the subsequent elimination entries by Parent Com Parent Company Balance Sheet Sale by Parent Assets. Liabilities & Equi Cash AR nventory Book Value Account DR CR $1,500,000 $10,000 $200,000 $640,000 $400,000 $150,000 Equipment Accumulated Depreciation Acquisition by Sub $0 $2,600,000 $100,000 $450,000 $600,000 $1,450,000 $2,600,000 Patent Account DR CR Total Assets AP Common Stock AdditionalPaid In Capital Retained Earnings Elimination Entries Total Liabilities & Equit Account DR CR Sub Company Balance Sheet Assets. Liabilities & Equi Cash AR nventory Land PP&E Accumulated Depreciation Patent Book Value $35,000 $10,000 $65,000 $40,000 $400,000 $150,000 $0 $400,000 $100,000 $100,000 $50,000 $150,000 $400,000 Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Assume that book Value Fair Value

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