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TB MC Qu
TB MC Qu. 05-29 Strickland Company sells inventory to its parent, Carter... Strickland Company sells inventory to its parent, Carter Company, at a profit during 2020. Carter sells one-third of the inventory in 2020. In the consolidation worksheet for 2020, which of the following accounts would be debited to eliminate the intra-entity transfer of inventory? Multiple Choice Retained earnings. Cost of goods sold. Inventory Investment in Strickland Company. O Sales. O
Expert Solution
Sales account is debited to eliminate the intra -entity transfer of inventory.
Journal entry
Sales A/c Dr. ×××
Cost of goods sold. A/c. ×××
( elimination of inter company transfer of inventory)
The sales revenue from the intercompany sale and the related cost of goods sold recorded by the transferring company must be removed.
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