ELIMINATION OF UNREALIZED PROFIT ON INTERCOMPANY SALES OF INVENTORY
Describe the financial reporting objectives for intercompany sales of inventory.
Determine the amount of intercompany profit, if any, to be eliminated from the consolidated statements.
Understand the concept of eliminating 100% of intercompany profit not realized in transactions with outsiders, and know the authoritative position.
Distinguish between upstream and downstream sales of inventory.
Compute the noncontrolling interest in consolidated net income for upstream and downstream sales, when not all the inventory has been sold to outsiders.
Prepare consolidated workpapers for firms with upstream and downstream sales using the cost, partial equity, and complete equity methods.
Discuss the treatment ...