What are King consolidation entries required

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Question - King Co. holds 75% of the common stock of Lee Co. King sold merchandise to Lee for $80,000 in 2020 and $90,000 in 2021. Approximately 20 percent of the inventory purchased during any one year is not used until the following year. King established the transfer price based on its normal gross profit rate. During 2020, King reported sales of $ 600,000 and cost of goods sold of $450,000. During 2021, King reported sales of $ 800,000 and cost of goods sold of $600,000. What are King's consolidation entries required by the intra-entity inventory transfers for 2021. Assume King uses the partial equity method, so that Retained Earnings account should be adjusted.

Reference no: EM133034638

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