Answer:
Purchase of Inventory by Planet (Parent)
Inventory $1,456,000 (debit)
Cash $1,456,000 (credit)
Sale of Inventory by Planet (Parent) to Subsidiary (Saturn)
Revenue $1,258,000 (debit)
Cost of Sales $1,258,000 (credit)
Sale to third Parties by Saturn
Cash $1,813,000 (debit)
Cost of Sales $1,036,000
Sales Revenue $1,813,000 (credit)
Inventory $1,036,000
Explanation:
Purchase of Inventory by Planet (Parent)
Inventory $1,456,000 (debit)
Cash $1,456,000 (credit)
<em>Inventory : 52,000 × $28 = $1,456,000</em>
Sale of Inventory by Planet (Parent)
<em>Note : This is an Intragroup transaction and need to be eliminated </em>
Revenue $1,258,000 (debit)
Cost of Sales $1,258,000 (credit)
<em>Revenue : 37,000 × $34 = $1,258,000</em>
Sale to third Parties by Saturn
Cash $1,813,000 (debit)
Cost of Sales $1,036,000
Sales Revenue $1,813,000 (credit)
Inventory $1,036,000
<em>Sales Revenue = 37,000 × $49 = $1,813,000</em>
<em>Cost of Sales = 37,000 × $28 = $1,036,000</em>
