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Financial Accounting - Multiple Inventory Transfers

Multiple inventory transfers between parent and subsidiary file. See attached file for full problem description.

Multiple Inventory Transfers between Parent and Subsidiary
Proud Companyt and Slinky Company both produce and purchase equipment for resale each period and
frequently sell to each other. Since Proud Company holds 60 percem ownership of Slinky Company,
Proud's controller compiled the following information with regard to intercompany trasaction between the two
companies in 20X5 and 20X6:

a) Give the eliminating entries required at December 31, 20X6. to eliminate the effects of the inventory transfers in preparing a full set of consolidated
financial statements
b) Compute the amount of cost of goods to be reported in the consolidated income statement for 20X6.

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Solution Summary

The solution solves for the elminating entries for Proud.