What amounts appear on the separate books of Pacific Brands

Assignment Help Accounting Basics

Reference no: EM132721397

Question - Sketchy Shoes is a subsidiary of Pacific Brands. Pacific routinely sells merchandise to Sketchy at a 25% markup on cost. Information on intercompany merchandise transactions is below (in thousands):

Inventory balance on Sketchy's books, purchased from Pacific Brands, January 1, 2017 $13,750

Inventory balance on Sketchy's books, purchased from Pacific Brands, December 31, 2017 14,575

Total sales revenue recorded by Pacific Brands on merchandise sales to Sketchy in 2017 550,000

Required -

a. Prepare the working paper eliminating entries related to these intercompany transactions at December 31, 2017.

b. Assume Sketchy sold merchandise acquired from Pacific Brands for $660,000 during 2017. What amounts appear on the separate books of Pacific Brands and Sketchy Shoes, relating to the intercompany merchandise transactions, for sales revenue and cost of goods sold? What are consolidated sales and cost of goods sold? Show how the eliminating entries in part a above adjust the balances reported on the separate books of the two entities to the correct consolidated balances.

Reference no: EM132721397

Questions Cloud

Network trace evidence of computer-related crimes : Discuss the major procedures that investigators must use in order to collect network trace evidence of computer-related crimes.

What is the purpose of the foundation : What is the purpose of the foundation and what have they accomplished so far? Henrietta lacks

What influence would the given have on patient care : What strategies can be implemented to ensure that all members of the interprofessional team know their roles and respect the contributions made by others.

Compare and contrast mitosis and meiosis : 1.List the phases of the cell cycle and briefly explain what happens in each of the phases

What amounts appear on the separate books of Pacific Brands : Assume Sketchy sold merchandise acquired from Pacific Brands for $660,000 during 2017. What amounts appear on the separate books of Pacific Brands

What action should dr delgado take : What approach should be taken to include the department's fixed costs in the budget? If, after attaching the appropriate amount of fixed costs to each DRG

High-profile criminal case : Assume you are a judge in state court presiding over a high-profile criminal case in which the governor, who is married and has five children,

How estimate what is profit or loss associated with copper : Estimate what is the profit or loss associated with Copper? Landmark operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pound

Define how would you utilize your education : Why do you think many healthcare practitioners are often unwilling to change practice patterns, based on research findings? Some practitioners criticize.

User Account

All Pages