Paris Corporation acquired Sierra Company at the beginning of the current year. Total retail value...
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Accounting
Paris Corporation acquired Sierra Company at the beginning of the current year. Total retail value of upstream sales for the year were $65,000; the retail value of downstream sales were $25,000. Sierra sells to Paris at a markup of 35% on cost; Paris sells to Sierra at a markup of 30% on sales price. Upstream sales of $13,500 remain in Paris' ending inventory. Downstream sales of $6,000 remain in Sierra's ending inventory.
Required
a. Calculate the unconfirmed profit in Paris' ending inventory and in Sierra's ending inventory.
b. Prepare the working paper eliminating entries for the intercompany inventory transactions that are required to consolidate the trial balances of Paris and Sierra for the year.
Unconfirmed profit in Paris' ending inventory =
Unconfirmed profit in Sierra's ending inventory =
Debit Elimination Entry 1 =
Credit Elimination Entry 1 =
Debit Elimination Entry 2 =
Credit Elimination Entry 2 =
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