images

ELIMINATION OF UNREALIZED PROFIT ON INTERCOMPANY SALES OF INVENTORY

LEARNING OBJECTIVES

images Describe the financial reporting objectives for intercompany sales of inventory.

images Determine the amount of intercompany profit, if any, to be eliminated from the consolidated statements.

images Understand the concept of eliminating 100% of intercompany profit not realized in transactions with outsiders, and know the authoritative position.

images Distinguish between upstream and downstream sales of inventory.

images Compute the noncontrolling interest in consolidated net income for upstream and downstream sales, when not all the inventory has been sold to outsiders.

images Prepare consolidated workpapers for firms with upstream and downstream sales using the cost, partial equity, and complete equity methods.

Discuss the treatment ...

Get Advanced Accounting, 5th Edition now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.