ACCTG505 College of William & Mary Intercompany Sale of Inventory Worksheet
Business Finance
Please show all calculations/excel formulas in sheet
Intercompany sale of inventory
Big owns 70% of Little Co.
Starting in 2020, Little routinely sells inventory to Big for subsequent resale.
The following information applies to the sales of inventory from Little to Big over a number of years:
2020 Sales
Sales price
Cost
Percentage resold in 2020
Percentage resold in 2021
Percentage resold in 2022
2021 sales
Sales price
Cost
Percentage resold in 2021
Percentage resold in 2022
There were no additional intercompany sales in 2022!
Required: Assume Big uses the partial equity method
Prepare elimination entries RELATED TO THESE INTERCOMPANY SALES for 2020, 2021, and 2022
Assuming Little reported earnings of $100,000 each year, what would be the income to the NC Interest in each of the 3 years?
