Nordway Corporation acquired 90 percent of Olman Company’s voting shares of stock in 20X1. During 20X4,...

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Nordway Corporation acquired 90 percent of Olman Company’svoting shares of stock in 20X1. During 20X4, Nordway purchased57,000 Playday doghouses for $26 each and sold 42,000 of them toOlman for $32 each. Olman sold all of the doghouses to retailestablishments prior to December 31, 20X4, for $47 each. Bothcompanies use perpetual inventory systems.
Required: a.Prepare the journal entries Nordway recorded for thepurchase of inventory and resale to Olman Company in 20X4. (If noentry is required for a transaction/event, select "No journal entryrequired" in the first account field.)
-Record the purchase of inventory on account.
-Record the sales of the Playday doghouses.
-Record the cost of goods sold.
b.Prepare the journal entries Olman recorded for the purchase ofinventory and resale to retail establishments in 20X4. (If no entryis required for a transaction/event, select "No journal entryrequired" in the first account field.)
-Record the purchase of inventory on account.
-Record the sales of the Playday doghouses.
-Record the cost of goods sold.
c.Prepare the worksheet consolidation entry(ies) needed inpreparing consolidated financial statements for 20X4 to remove alleffects of the intercompany sale. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.)
-Record the consolidation entry.

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S.No.	Accounts titles and Explanation	Debit ($)	Credit ($)
1.	Merchandise Inventory	1,482,000
	Cash (57,000*$26)		1,482,000
	(To record the purchase of inventory on account)

2.	Cash	1,344,000
	Sales (42,000*$32)		1,344,000
	(To record the sales of the Playday doghouses)

3.	Cost of goods sold	1,092,000
	Inventory (42,000*$26)		1,092,000
	(To record the cost of goods sold)

S.No.	Accounts titles and Explanation	Debit ($)	Credit ($)
1.	Merchandise Inventory	1,344,000
	Cash (42,000*$32)		1,344,000
	(To record the purchase of inventory on account)

2.	Cash	1,974,000
	Sales (42,000*$47)		1,974,000
	(To record the sales)

3.	Cost of goods sold	1,344,000
	Inventory		1,344,000
	(To record the cost of goods sold)

S.No.	Accounts titles and Explanation	Debit ($)	Credit ($)
1.	Sales	1,344,000
	Cost of goods sold		1,344,000
	(To record the consolidation entry)

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Nordway Corporation acquired 90 percent of Olman Company’svoting shares of stock in 20X1. During 20X4, Nordway purchased57,000 Playday doghouses for $26 each and sold 42,000 of them toOlman for $32 each. Olman sold all of the doghouses to retailestablishments prior to December 31, 20X4, for $47 each. Bothcompanies use perpetual inventory systems.Required: a.Prepare the journal entries Nordway recorded for thepurchase of inventory and resale to Olman Company in 20X4. (If noentry is required for a transaction/event, select "No journal entryrequired" in the first account field.)-Record the purchase of inventory on account.-Record the sales of the Playday doghouses.-Record the cost of goods sold.b.Prepare the journal entries Olman recorded for the purchase ofinventory and resale to retail establishments in 20X4. (If no entryis required for a transaction/event, select "No journal entryrequired" in the first account field.)-Record the purchase of inventory on account.-Record the sales of the Playday doghouses.-Record the cost of goods sold.c.Prepare the worksheet consolidation entry(ies) needed inpreparing consolidated financial statements for 20X4 to remove alleffects of the intercompany sale. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.)-Record the consolidation entry.